Having made the decision to file bankruptcy, most people have more questions than answers. Is it best to opt for a Chapter 7 or a Chapter 13? Is there anything that could stop me filing? Will I lose my house and my car if I opt for Georgia bankruptcy? Who can help me ensure that the process is as smooth and painless as possible?
Relatively simple answers to these questions are:
- Both Chapter 7 and Chapter 13 bankruptcy have advantages and disadvantages, depending on a person’s circumstances.
- If you don’t pass the mandatory bankruptcy means test you won’t be able to file a Chapter 7. And if you don’t have a regular income, you can’t file a Chapter 13. Furthermore, those with secured debts in excess of $1,010,650 or unsecured debts totally more than $336,900 cannot file a Chapter 13 either.
- An experienced Atlanta bankruptcy firm will advise how you can keep your home and car. Even if your car has already been repossessed, or is in the process of being repossessed, a good bankruptcy attorney will be able to get it back for you.
- A professional bankruptcy attorney from an established Atlanta bankruptcy firm will make any bankruptcy process easier and less stressful for you.
There are certain procedures that need to be followed when opting to file for bankruptcy, as well as certain issues that can complicate the Georgia bankruptcy process. The means test can be a major issue. Additionally, Georgia has its own exemptions, and these are used to determine how property may be protected from creditors. Rather than leave decisions to a trustee to decide, a bankruptcy attorney will make sure you claim maximum exemption limits including the valuable wild card exemptions.
Chapter 7 Bankruptcy Versus Chapter 13
While a Chapter 7 is generally considered to be a traditional bankruptcy, if you have a disposal income that is sufficient to pay off creditors, then you won’t qualify. If you do qualify, a Chapter 7 is a great way to make a fresh start and get rid of unsecured debt. An Atlanta bankruptcy firm will help you keep your home and car.
Commonly referred to as a wage earner’s plan, a Chapter 13 is only open to those who have a regular income. But it’s usually the best option for those who want to reinstate mortgages and stop foreclosures. It doesn’t mean that you need enough money to repay everything you owe, but rather enough to pay creditors something that will be an acceptable compromise to all parties.
A Chapter 13 involves a repayment plan that has to be ratified by the Court. The plan states the repayment period, which will be anything from three to five years, and then you deal with a trustee. This means that creditors cannot start or continue with wage garnishments or lawsuits, and they cannot even make telephonic demands.
How the Bankruptcy Means Test Can Complicate Georgia Bankruptcy
Ultimately, the means test will determine whether you can opt for a Chapter 7 or not. But it can be a complicated process because it depends on total household income (even if your spouse is not declaring bankruptcy), and there are two stages to the test.
- Total household income for is compared to the median income of Georgia for the past six months. This figure comes from the IRS and everyone living in the house is factored into the equation, including children. If total household income is lower than the meridian, the person (or couple) will qualify for a Chapter 7. If not, the second stage kicks in.
- Certain costs are taken into account, including rent or mortgage. This can make a huge difference, which is why a bankruptcy attorney will need to know all your monthly expenses including insurance, transportation costs, and even medical expenses.
If you are hoping to file a Chapter 7 bankruptcy, a knowledgeable Atlanta bankruptcy firm will be able to pre-determine whether you qualify or not, and whether additional information should be supplied for the means test. A good bankruptcy attorney will also know what expenses will typically be acceptable and what other issues might complicate the process.
If you need help with a Georgia bankruptcy case the attorneys at C. Golden & Fleming, LLC are ready to help. Contact us for a consultation and we’ll get you going.