• Chapter 7 Bankruptcy

    If you can qualify based on your income, Chapter 7 may be a great way to discharge your debt and get a fresh financial start in the next 4-5 months.

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Chapter 7 is a liquidation of debts under the protection of the federal government for consumers with limited income

If you don’t have any assets, or very little equity in those assets, and limited income then chapter 7 may be the best choice.

  • Stop garnishments immediately.
  • Affordable payment plan for clients
  • Allows you to remove judgment liens
  • Case lasts anywhere from 4-6 months.
  • Does not help you restructure mortgage arrears
  • Allow you to “redeem” or reaffirm on secured debt
  • Reported on your credit 10 years from date of filing.
  • May be able to discharge tax debt older than 3 years
  • Does not discharge child support or alimony arrears
  • Married couples can either file together or just one person can file.

Who Can File Chapter 7 Bankruptcy?

In order to qualify for Chapter 7 you need to ensure that you not only pass the means test but that you also don’t have excess income left over in your normal monthly income.

If you are overwhelmed by credit card debt, past-due medical bills, and other crushing expenses, filing for Chapter 7 bankruptcy may be a way for you to get some relief from creditors and start fresh with your finances. A skillful Atlanta bankruptcy attorney can advise individuals and businesses alike on whether Chapter 7 may be the right choice for them if filing here in Georgia. 

In order to file for Chapter 7, you must meet some requirements. 

  1. You Have Not Filed a Chapter 7 in the Last 8 Years: You are only able to file Chapter 7 bankruptcy every 8 years from the date of filing. If you don’t meet this requirement though you can still file a chapter 13 bankruptcy and may be eligible to discharge your debt at less than 100%.

  2. You Have Fulfilled the Credit Counseling Requirement: A Chapter 7 debtor must file with the bankruptcy court a pre-filing certificate at least 180 days prior to filing for Chapter 7.

  3. Your Normal Monthly Income: After your reasonable expenses are deducted from your household income you have very little disposable income left over.

  4. You Pass the “Mean Test”: With the enactment of the Bankruptcy Abuse and Consumer Protection Act of 2005 (“BAPCA”), bankruptcy debtors are now required to pass a “means test” in order to qualify for Chapter 7 bankruptcy. In order to pass the means test, you must have little or no disposable income.  The means test compares your average monthly income for the six-month period preceding your bankruptcy against the median income of a similar household in your state. If your income is below the median, you automatically qualify. You can check your income at this link to see if you pass: MEANS TEST CALCULATOR. Don’t worry if you don’t “pass” the initial test. If your income is above median, you will be required to complete the entire means test form instead of qualifying just based on your income. An experience bankruptcy attorney can walk you through this process and guide you on what is and is not permitted in the district you are filing in.

It is important to note that there are strict income limits to qualify for Chapter 7 bankruptcy. To learn more about whether you qualify, contact our knowledgeable Chapter 7 bankruptcy attorneys today.

What Debt Can You Get Rid of in Chapter 7?

  • Credit cards
  • Medical bills
  • Deficiency balances resulting from the sale of a repossessed car or foreclosed mortgage
  • Unsecured personal loans
  • Store accounts
  • Trade or vendor debt
  • Personal liability resulting from the guarantee of another’s debt
  • Certain kinds of tax obligations

What Debt Can You NOT Get Rid of in Chapter 7?

  • Student loans
  • Marital/domestic obligations
  • Certain tax obligations
  • Criminal restitution
  • Debt incurred through fraud
  • Debt incurred by defalcation of fiduciary duty
  • Debts incurred by willful and malicious injury

Why Could a Chapter 7 Discharge Be Denied?

99% of individual debtors receive a discharge in Chapter 7 cases (excluding those that are converted or dismissed) however in a few circumstances you could be denied.

Reasons a Chapter 7 discharge could be denied:

  • The debtor did not keep or provide adequate financial records.
  • The debtor could not adequately explain loss of assets.
  • The debtor committed a bankruptcy crime (perjury, etc.)
  • The debtor fraudulently transferred, hid, or destroyed property that should have been liquidated.

Working with a qualified Chapter 7 Atlanta bankruptcy lawyer can help you avoid making mistakes that may prove harmful to your case. Schedule a free consultation with our team today.

How Chapter 7 Bankruptcy Works

Chapter 7 Bankruptcy Usually Lasts About 4-5 Months from Start to Finish

The first step in a Chapter 7 bankruptcy case is to meet with an experienced bankruptcy attorney to determine whether you qualify. There are strict income limits that are based on the state’s median income level, and your attorney can help you determine whether you may be eligible or whether you should consider filing for Chapter 13 bankruptcy instead.

If you decide to move forward, here are the steps when filing for a Chapter 7 bankruptcy:

  • Complete credit counseling. You will receive a certificate to show the court.

  • File a petition with the Bankruptcy Court. This will automatically stop most creditors from contacting you.

  • Provide additional documentation. You will also need to provide a copy of your tax return for the most recent year.

  • The Bankruptcy Court will appoint a trustee to liquidate any nonexempt assets and oversee the case. The trustee will pay unsecured creditors with proceeds from the sale of nonexempt assets. (In many Chapter 7 cases, all of the person’s assets are either exempt or subject to valid liens, which means they cannot be liquidated.)

  • The trustee will hold a meeting of creditors, also known as a 341 meeting. This will be held between 30 and 45 days after your bankruptcy petition is filed. You and your attorney will attend, and you will be put under oath to answer questions about your finances. This hearing is called the 341 Meeting of Creditors.  It may sound scary but it really isn’t.  You are not in a court room. You are not in front of a judge,  You are in a conference room and your attorney is with you 100% of the way. Most of the time the hearing lasts about 10-15 minutes.  At this hearing the trustee will ask you some questions about the petition that has been filed.

  • Reaffirmation agreements are filed. If you are reaffirming (retaining debt and not discharging it) any loans then the reaffirmation agreements need to be filed with the court no later than 45 days from your 341 hearing date.

  • Complete the second credit counseling course. Before the discharge date you will need to complete a second credit counseling course and file this certificate with the court.

  • In most cases, the Bankruptcy Court will issue a discharge order.A discharge releases you from most debts and stops creditors from pursuing you any further. This typically happens 60 to 90 days after the creditors’ meeting.

Although most Chapter 7 cases move through the system smoothly, our experienced bankruptcy lawyers are always prepared for bumps in the road. We have extensive experience in bankruptcy litigation, and if needed, we can help you convert a Chapter 7 into a Chapter 13.

Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy

There are many situations in which you may not be able to file Chapter 7 or a Chapter 13 is a better fit due to your financial goals. An experienced bankruptcy attorney can provide you with the best options based on your needs.

Decide which chapter to file can be confusing. Chapter 7 bankruptcy forces you to liquidate your assets that are not protected by exemptions and repay creditors. This means that if you have too much equity in your home that the Chapter 7 Trustee will sell the home and use the proceeds to pay your creditors.  You may be OK with that but most people want to keep their homes.  Typically, the entire Chapter 7 process is completed within four to six months.

Keep in mind though that Chapter 7 has disadvantages, too. Lenders who have already filed to foreclose on your home are only temporarily stalled, and other debts such as mortgage liens can be collected after the case is concluded. Cosigners on your debt are still obligated to pay. If you are facing a foreclosure and want to keep your house then you need to file a Chapter 13 and not a Chapter 7 bankruptcy.

Filing for Chapter 13 protection allows you to keep all your property. It simply extends the amount of time you have to repay what you owe after the bankruptcy court issues its ruling. It is possible to file a Chapter 13 bankruptcy after a Chapter 7 is completed, allowing you to seek a reduction in whatever debts remain from a Chapter 7 discharge. Chapter 13 will also protect your cosigners against collection efforts.

Chapter 7 cases do not allow you to remove junior liens or to “cram down” secured loans on cars and furniture.  You also need to remember that you have to qualify for Chapter 7 bankruptcy and your current income and past six months of income have to be reviewed.

What Do You Need to Do If You Want to File Bankruptcy?

Our law firm focuses on the client and their needs. We make the consultation and filing process as smooth as possible for new clients.

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What Documents Will I Need If I Decide to File Bankruptcy Case?

The good news is that our firm will pull your credit reports and perform a nationwide lien search. Just review the list of documents that the court will require below.

If you are filing a Chapter 13 case you will be required to provide the last 60 days of income statements.  If you are unemployed, self-employed, or receive SSI you can sign an affidavit as to this in our office or online.

The court will require a copy of your last filed tax return. If you are not required to file taxes you can sign an affidavit as to this. If you have misplaced your copy we can request a transcript when you come into our office.

In order for your case to be valid upon filing you must complete a pre-filing credit counseling course.  There are several different companies that provide this service.  The three companies that most of our clients use are:

  1. www.debtoredu.com 
  2. www.abacuscc.org
  3. https://ccadvising.com

File Your Case the Right Way With the Right Law Firm! Don’t Become Just a Case Number at a Bankruptcy Mill mega firm!

Saedi Law Group has achieved its success by providing honest and experienced legal advice to Georgia consumers. We provide real-life options for clients and walk them through the entire process.

Schedule a FREE Consultation

Our firm offers video consultation from the convenience of your home or in-person appointments in one of our 10 office locations.

We invite you to contact us either online or by phone at 404-919-7296 to schedule a free confidential consultation to review your personal financial situation and what options we can provide to protect you from creditors. For additional information about bankruptcy please also check out our YouTube Channel which has up to date vlogs on issues related to personal bankruptcy.

© 2020 Saedi Law Group LLC. All Rights Reserved. LEGAL DISCLAIMER: We are a debt relief agency. We help people obtain relief from their creditors by filing for bankruptcy. Nothing posted on this website shall constitute legal advice. If you need legal advice please contact our office to schedule an appointment. No attorney client relationship exists until we have a written contract.
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