Most people qualify, both formally and informally, to file bankruptcy in Georgia. These formal and informal qualifications are discussed in detail below.

In the coronavirus age, more people are asking questions like this one than ever before. According to one study, 90 percent of Georgians are experiencing significant financial stress due to COVID-19. Most families live from hand to mouth. So, they do not have the resources to deal with unexpected financial storms, like a coronavirus-related job loss or illness. If you are in this 90 percent, you have essentially two options. You can hope outside forces improve your financial picture, or you can take control of the situation yourself.

Whether or not you think you can file bankruptcy, always talk to a Georgia bankruptcy lawyer about your case. Many qualifications vary in different cases. So, you never know what relief is available unless you ask.

Benefits of Bankruptcy

The Automatic Stay, asset protection, and debt discharge are the three biggest reasons your family or business should file bankruptcy if financial stress is a serious problem.

In most cases, Section 362 of the Bankruptcy code immediately halts all creditor adverse actions, such as:

• Foreclosure
• Wage garnishment
• Collection lawsuits
• Repossession
• Harassing phone calls

Typically, moneylenders can only get around the Stay if they have special permission from the bankruptcy judge. If moneylenders go to court with such a request, your Georgia bankruptcy attorney represents you during this hearing.

Furthermore, Georgia has some of the broadest bankruptcy exemptions in the country. These exemptions protect your property from creditor seizure and liquidation. Some exemptions include:

• House
• Motor vehicle
• Government benefits, such as Social Security benefits
• Personal property
• Retirement account
• Current wages

Finally, at the end of the bankruptcy, the judge discharges most unsecured debts, such as credit cards and medical bills. That discharge, along with the chance to erase mortgage arrearage and other secured debt delinquency over time, gives your family a fresh start.

Formal Qualifications

Regardless of the chapter they file under, all bankruptcy debtors must complete a pre-filing credit counselling class and a post-filing debtor education class. These brief classes, which can be completed online, usually only cost a few dollars.

Moreover, if the debtor has filed bankruptcy within the last six months, the Automatic Stay might have only limited applicability. The same thing is true regarding a discharge if the debtor received a discharge within the past few years.

Chapter 7 debtors must pass the means test. Congress added this requirement when it revised the Bankruptcy Code in 2005. The debtor’s annual household income must be lower than the average for that household size in that area. As of May 1, 2020, that figure is $87,317 for a family of four in Georgia. As mentioned above, this figure is not set in stone. If your annual income is above this level, you can probably still file Chapter 7.

The Chapter 13 debt ceilings are a bit different. These figures are more difficult, but not impossible, to wiggle around. Generally, Chapter 13 debtors must have less than $1.3 million in secured debt and $400,000 in unsecured debt. These ceilings are quite high, so they usually do not come into play, unless the debtor just bought a mansion or uses credit cards like Homer Simpson eats donuts.

Georgia Bankruptcy Lawyers and Informal Qualifications

There are also some informal qualifications which vary by jurisdiction. These qualifications are also unwritten. So, only the best Georgia bankruptcy attorneys are familiar with them. These informal qualifications usually pertain to the debtor’s income/expense balance, as reflected in Schedules I and J.

Typically, Chapter 7 debtors must spend more than they make, at least on paper. If the debtor has a sizable monthly surplus, the trustee (person who oversees the bankruptcy for the judge) often questions the need to file Chapter 7.

For Chapter 13 debtors, this informal qualification is reversed. These debtors must have sufficient disposable income to fund a monthly debt consolidation payment. This payment must be high enough to retire all secured debt delinquency, and some unsecured debts as well before the protected repayment period ends.

If financial circumstances change and the payment becomes burdensome, a Georgia bankruptcy lawyer can either file a motion to reduce the payment or convert the case to Chapter 7.

Speak to a Qualified Georgia Bankruptcy Attorney Immediately

Most people can file for bankruptcy if needed. For a free consultation with an experienced Georgia bankruptcy lawyer, contact Morgan & Morgan, Attorneys at Law, P.C. at (706) 843-2905. We routinely handle matters in Clarke County and nearby jurisdictions.

Lee Paulk Morgan

Lee Paulk Morgan

With more than 41 years of experience in the areas of Bankruptcy, Disability, and Workers’ Compensation, Lee Paulk Morgan is one of the most respected Bankruptcy and Disability attorneys in Athens, Georgia. His tireless dedication to serving clients has gained him the reputation of a premier attorney in his areas of practice, as well as the trust and respect of other legal experts, who often refer clients to him.