If you need a fresh start right away, Chapter 7 bankruptcy is probably for you. From start to finish, filing many of these cases only last about six or nine months. Chapter 7 will stay on your credit report for 10 years, but it is not critically destructive to your credit as many people think. Getting a fresh start with Chapter 7 is a way to stop the cycle of crushing credit cards and other unsecured debt.

Essentially, Chapter 7 is an opportunity for a fresh start. An Athens bankruptcy lawyer helps you make the most of your fresh start. An attorney gives you solid advice throughout the process and connects you with financial and other professionals. Furthermore, only an Athens bankruptcy lawyer can stand up for you in court. That’s peace of mind you cannot buy.

Qualifying for Bankruptcy Chapter 7 in GA

The first step in the aforementioned process is meeting Chapter 7’s eligibility requirements. In addition to the written qualifications, there are some unwritten requirements.

The Means Test in Georgia

2005 revisions to the Bankruptcy Code added the means test requirement to Chapter 7 bankruptcy. As of November 1, 2020, for a family of four, your annual household income must be less than $91,161. That’s the average household income for that family size in Georgia. Some regional variations might apply. The cost of living is higher in metro Atlanta than it is in more rural parts of the state. This difference sometimes affects means test results.

Mandatory Financial Management Classes

Other new requirements include two financial management classes. You must take one before you file and one after you file.

The Informal Qualification in GA

The informal qualification also relates to income. Essentially, Chapter 7 debtors tell the court that they cannot pay their debts and they need the court’s protection. So, if your income exceeds your expenses, this argument rings a bit hollow, at least to many trustees (people who oversee bankruptcies for judges). If you are slightly in the red every month, you avoid this added scrutiny.

What to Expect When You File Chapter 7 in Georgia

If you do not qualify for Chapter 7, other options are usually available, such as non-bankruptcy debt negotiation and Chapter 13 bankruptcy. Sometimes, these options are better than Chapter 7. So, an Athens bankruptcy lawyer should always thoroughly evaluate your case.

Filing the Petition and Schedules for Chapter 7

If Chapter 7 is the way to go, filing the petition and schedules is the first step. These documents go into almost mind-numbing detail about your finances. Most people would probably spend weeks preparing these forms on their own. An experienced attorney can prepare them in a matter of days.

The Georgia Automatic Stay

As soon as debtors file their voluntary petition, the Automatic Stay kicks in. Section 362 of the Bankruptcy Code prohibits adverse creditor actions, such as:

• Eviction,
• Wage garnishment,
• Repossession,
• Creditor lawsuits, and
• Evictions.

Moneylenders can only bypass the Stay in limited circumstances, and only if they can overcome your Athens bankruptcy lawyer’s arguments.

The 341 Meeting with Creditors

About six weeks later, debtors meet with trustees. Chapter 7 trustees look for evidence of bankruptcy fraud and verify the filer’s identity. So, before or at this meeting, you typically must produce documents, like recent tax returns and a government-issued photo ID. An Athens bankruptcy lawyer can usually make alternate arrangements if you do not have these things.

Assuming everything goes well at the meeting, and it usually does, most judges sign discharge orders without requiring hearings. A Chapter 7 discharge applies to most unsecured debts, such as:

• Medical bills,
• Revolving charge accounts,
• Payday loans,
• Credit cards, and
• Signature loans.

What a Discharge Is in Georgia

“Discharge” means the judge eliminates the legal obligation to repay the debt. The obligation itself. Assume Mr. Fix-It files a mechanics lien against Eddie because it claims Eddie did not pay for some home improvements. If Eddie files Chapter 7, he is not legally required to pay the bill. But the lien remains. An Athens bankruptcy lawyer must deal with this matter separately.

A number of these options are available in a Chapter 7. Lien stripping, which usually involves multiple home mortgages, is a good example.

Now assume Eddie used 80/20 financing to buy his $200,000 house. There’s a $160,000 senior lien and a $40,000 junior lien. Eddie’s home’s value has decreased to $160,000. The home’s value is not large enough to secure both liens.

Under these facts, if an Athens bankruptcy lawyer makes the proper motion, a judge could declare that the junior lien is an unsecured debt. As mentioned, unsecured debts are dischargeable. So, this label could save Eddie thousands of dollars a year for several years.

Consult an Athens Bankruptcy Lawyer About Your Chapter 7 Bankruptcy in GA

Chapter 7 lasts less than a year, but the benefits could last much longer. For a free consultation with an experienced Athens bankruptcy lawyer, contact Morgan & Morgan, Attorneys at Law, P.C. Convenient payment plans are available.