You are bound to have a lot of questions if you are considering filing for Chapter 7 bankruptcy in Georgia. As the largest bankruptcy filer in the state, Clark & Washington, PC has the answers you need. We provide answers to the most frequently asked questions about Chapter 7 bankruptcy below.

What is Chapter 7 bankruptcy?

Chapter 7 bankruptcy eliminates most consumer debt with several exceptions. For example, the bankruptcy court cannot discharge any debt that you fail to list in your original bankruptcy petition. Here are several other examples of non-dischargeable debt:

  • Amounts you must pay back to retirement plans that include a built-in tax advantage
  • Certain taxes
  • Child support or alimony paid to a former spouse along with attorney fees related to the cases
  • Criminal restitution, court fines, and other penalties
  • Fines and penalties owed to the federal government
  • Homeowner association and related fees
  • Settlement owed to another person whom you injured with your vehicle while driving intoxicated
  • Student loans unless you meet certain rare exceptions

Your household income must fall below the median income in Georgia for your family size. For a family of four, the maximum amount you can earn from all sources is $68,085. That amount drops to $40,631 for a single person with no dependents. If your income falls within the state’s means test guidelines, you must submit the following documentation to initiate your Chapter 7 bankruptcy filing:

  • Completed bankruptcy petition
  • Schedule of current assets and liabilities
  • Schedule of current income and expenses
  • Schedule of contracts and unexpired leases
  • Copy of most recent tax return
  • Certificate of completion for credit counseling

Chapter 7 bankruptcy is available to individuals, partnerships, corporations, and other business entities. The means test applies to individual filers only. Married consumers can file on their own if desired, but that leaves joint assets available for creditors to seize.filing chapter 7 bankruptcy

What Do You Lose When You File for Chapter 7 Bankruptcy?

Clients are often worried that they will lose their house and car if they file for Chapter 7 bankruptcy in Georgia. While this is a legitimate concern, the good news is that Georgia allows several exemptions in Chapter 7 bankruptcy. The term exemption means you do not have to sell the item to pay creditors. Besides your primary residence and vehicle you use to travel to and from work, the state typically allows the following exemptions in debt elimination bankruptcy cases:

  • Alimony and child support received
  • Burial plots up to $1,000
  • Certain types of insurance policies
  • Certain types of pensions
  • Personal property, including animals, appliances, books, clothing, crops, furnishings, household items, and musical instruments with a maximum total value of all items set at $3,500.
  • Personal injury and wrongful death settlements needed for support up to $7,500
  • Various types of public benefits, such as workers’ compensation and unemployment payments
  • 75 percent of earned but unpaid wages

At its discretion, the bankruptcy court can demand the sale of any personal property not included in the list of exemptions to repay creditors.

Is Chapter 7 Bankruptcy a Good Idea?

Chapter 7 bankruptcy is a last resort for consumers who have failed to lower their debt to manageable levels through other means. Debt settlement programs are just one example. Even so, filing for Chapter 7 bankruptcy can be an attractive option when you treat the process as a fresh start as intended. Eliminating past debts gives you the opportunity to build savings and restore your credit history over time by taking on small loans and repaying them immediately.

Our attorneys will ensure that you know about all other options available to you to eliminate or reduce your debt. You have no legal obligation to follow through with completing a petition and submitting documentation for Chapter 7 bankruptcy if you feel that you would benefit more from exercising a different option.

How Long Does Chapter 7 Bankruptcy Stay on Your Credit Report?

Bankruptcy is a matter of public record. Information about your case stays on your credit file for 10 years from the date of discharge, not the date you filed. Assuming you are eligible for Chapter 7 bankruptcy in Georgia, the process from filing to discharge should not be more than a few months.

The more time that passes since your bankruptcy discharge, the greater the likelihood that new creditors will approve you for an account. We encourage clients to think of Chapter 7 bankruptcy as a second chance. If you can demonstrate a solid payment history with smaller lines of credit, you can eventually restore your credit score and ratings to pre-bankruptcy levels. However, you must avoid taking on more credit than you can reasonably expect to pay back.

Schedule a Consultation with Clark & Washington, PC Today

We invite you to meet with us online or in person to determine if Chapter 7 bankruptcy is the right debt relief option for you. You may request your appointment by calling 770-488-9300 or by completing our contact form.