If you’re planning to file for bankruptcy before the courts close for the holidays you’d best start the process right now. There are certain things that need to be done before you file, and a number of processes that need to be followed thereafter.
The Bankruptcy Process
The first thing you will need to do is decide whether to file a Chapter 7 or a Chapter 13 bankruptcy. In Georgia, this entails a bankruptcy means test that analyzes your income and expenses. The decision will hinge on the amount and type of debt you have, as well as your ability to repay whatever is owed. An Atlanta bankruptcy attorney will be able to advise which option is open to you.
The next step will usually be to go for credit counseling, although you can undertake counseling before you meet with an attorney. Credit counseling is mandatory in terms of federal law (the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005) and must be done no longer than six months before filing for bankruptcy. Also referred to as a pre-petition counseling session, credit counseling takes at least 60 minutes and can be done telephonically or via the internet. The sooner this is done the better especially if you are timing your bankruptcy for the holidays.
Another pressing matter will be to get all the necessary paperwork together prior to filing. In addition to income and expenses for the past couple of years, you will need to list all debts – both secured and unsecured – as well as every bit of property you own. The latter will include anything of value including real estate, motor vehicles, boats, jewelry, antique furniture, and artworks. You will also need copies of all tax returns submitted during the past two years as well as title deeds and documentation relating to loans.
Once all this has been done, you can sit down with your Atlanta bankruptcy attorney and complete all the necessary paperwork. This will include all the forms that relate to exemptions as well as the various schedules required by the court. If you are filing Chapter 13 you will also have to agree to a payment plan that will part of the bankruptcy agreement.
You might not have time to meet before the Thanksgiving holidays at the end of November, but you’ve still got plenty of time to get your bankruptcy started before the Christmas and New Year holidays. Either way, the quicker you can get it done before the holidays, the sooner the automatic stay will come into effect. What this means is that as soon as your bankruptcy application has been filed, creditors cannot make contact with you or make any claims on your property. That will be a relief and will probably ensure you are much more relaxed during the holidays.
Once your bankruptcy has been filed the court will appoint a trustee who will review all the paperwork and take legal control of your debts and repayments. At this stage, you will also need to take what is known as a pre-discharge debtor education course that deals with personal finance management. Only available via the internet, this course takes at least two hours and it must be done before you complete the payments that are due under the bankruptcy plan.
So how long will the whole process of bankruptcy take?
Timing Bankruptcy for the Holidays
Once you have filed for bankruptcy you’ll have to wait about a month for the trustee to call a meeting of all creditors, which you will also have to attend. In practice, creditors hardly ever attend Chapter 7 creditor meetings. A couple of creditors may attend the meeting if the bankruptcy is in terms of Chapter 13, particularly if there are queries or objections. Problems are usually ironed out at these meetings, but if the objection persists it will have to go before a judge.
In Georgia, it usually takes between four and six months from the time you file in court to discharge a Chapter 7, although there are some issues that might make it take longer. These include:
- The availability of assets for sale so that creditors can be repaid. Most people opting for Chapter 7 do so because they are eligible for exemptions that will allow them to keep assets like cars and houses.
- Above average earnings by the debtor that might prompt an investigation into why that person cannot file a Chapter 13 and enter into a payment plan.
- Objections to discharge by creditors.
- A debtor’s liens on property that creditors want to be removed.
Chapter 13 bankruptcy is a much slower process and in Georgia, it usually takes between three and five years to complete. Essentially, this is because the bankrupt person has time to repay debts according to the agreed payment plan.
So, you will see that while you can certainly get the ball rolling and have your application for bankruptcy filed before the holidays, you’re going to have to wait it out before the bankruptcy is made final.
If you need advice about timing your bankruptcy for the holidays or perhaps after the holidays, call the friendly professional Atlanta bankruptcy attorneys at C. Golden & Fleming, LLC as soon as you can.