Many people want to know more about Chapter 7 because the numbers simply don’t add up. When it comes to credit card debt, most financial planners use the 10 percent rule. If credit card debt exceeds 10 percent of your income, you probably have too much debt. The average credit card debt load in the United States is about $6,200 per household. If you’re wondering how does chapter 7 bankruptcy work in Athens and Georgia, you might be ready to take control of your finances.

People facing financial debt that they can’t keep up with have two options. They can wait and hope things get better, or they can partner with a bankruptcy lawyer in Athens and take control over their own finances. An attorney guides you through the entire process, from start to finish. Additionally, a Georgia bankruptcy lawyer speaks for your during meetings and stands up for you in court.

What Is the Automatic Stay in Georgia?

When debtors fall behind on payments, credit card companies usually resort to aggressive, and even underhanded, collection tactics. Recently, the Consumer Financial Protection Bureau essentially gave these companies a green light in this area.

Largely because of this rule change, Section 362 of the Bankruptcy Code is about the only protection distressed debtors can rely on. The Automatic Stay immediately stops all adverse creditor actions, such as:

• Repossession,
• Wage garnishment,
• Foreclosure,
• Collection lawsuits, and
• Evictions.

Unsecured creditors can only bypass the Automatic Stay in extreme circumstances. Usually, these circumstances involve alleged bankruptcy fraud. In this context, fraud usually means borrowing money without intending to repay it. If Terry gets a new credit card, maxes it out, largely on luxury items, and files bankruptcy a few months later, a fraud case might hold up in court. That’s especially true if Terry does not have a Georgia bankruptcy lawyer on his side.

What is a 341 Meeting in Georgia?

About six weeks after debtors file their voluntary petitions, the debtor and the debtor’s Georgia bankruptcy lawyer meet with the bankruptcy trustee (person who manages the case for the judge). In a Chapter 7, the trustee basically examines fraud badges and verifies the debtor’s identity. A Chapter 13 trustee’s job is much bigger, but that’s the subject of another blog.

Requested Documents for Bankruptcy in Athens Georgia

To fulfil these missions, the trustee usually requests documents. These requests do not mean you are in trouble. They are just part of the process. Common document requests include:

• Recent tax returns,
• Social Security card,
• Recent bank statements,
• Government-issued photo ID, and
• Recent pay stubs or, if the petitioner is self-employed, recent income/expense breakdowns.

What If I Don’t Have Any Documents?

If these documents are unavailable, a Georgia bankruptcy lawyer can usually make alternative arrangements. It’s important to comply with these requests to the greatest extent possible. You do not want the trustee to think you have something to hide. Furthermore, failure to cooperate with the trustee is grounds for dismissal.

How Does Chapter 7 Bankruptcy Work to Get a Debt Discharge in MN?

Assuming everything goes well at this meeting, the judge usually discharges most unsecured debts without requiring a hearing. Even though this discharge is automatic, an attorney still plays an important role in the process.

Debt discharges is limited. A judge only eliminates the legal obligation to repay an unsecured debt. Assume the IRS files a tax lien against Veronica and she files Chapter 7. Even if the judge discharges Veronica’s tax debt, the lien remains. A Georgia bankruptcy lawyer must deal with the IRS separately on this point.

Priority Unsecured Debts

Past-due income taxes are priority unsecured debts. So are student loans, child support, and a few other unsecured obligations. The judge will not discharge these obligations unless a Georgia bankruptcy lawyer files a motion. Usually, these disputes go to bankruptcy mediation. During mediation, an attorney is usually able to at least obtain a partial discharge, even if the debtor does not qualify for any relief at all.

Dischargeable Unsecured and Secured Debt

Finally, the difference between a dischargeable unsecured debt and a secured debt is not always clear. Many furniture stores and other retailers issue credit cards which can only be used for store merchandise. If Mary buys $5,000 of furniture at Rooms to Go and puts it on a Rooms to Go credit card, that obligation might or might not be unsecured. Or, Raul might pay his car note with his credit card.

In questionable situations like these, an attorney is a strong advocate for you, so a lawyer is usually able to resolve these matters successfully.

Contact a Chapter 7 Bankruptcy Lawyer in Athens, GA to Take Back Control

If you file Chapter 7, you get a fresh start. For a free consultation with an experienced Georgia bankruptcy lawyer, contact Morgan & Morgan, Attorneys at Law, P.C. Virtual, after-hours, and home visits are available.