Bankruptcy Process in Atlanta

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 changed the Georgia bankruptcy filing process. A qualified bankruptcy attorney in Atlanta can help guide you through the new bankruptcy laws.

Credit Counseling – Anyone considering filing for either Chapter 7 or Chapter 13 bankruptcy must now complete approved credit counseling within 6 months before filing for bankruptcy.

Taxes – You are now required to file all taxes – past and current – before you can file for bankruptcy.

Gathering Documentation – Bankruptcy cases now require extensive documentation, especially for Chapter 7. Most bankruptcy attorneys now ask clients considering bankruptcy to provide this documentation at the first meeting.

Documentation required for bankruptcy cases include:

• Pay stubs and/or proof of income for 6 months prior to filing bankruptcy
• Copies of tax returns for at least the previous 2 years
• Proof of monthly expenses
• Proof of all secured and unsecured debt – mortgage, car loan, credit cards, student loans
• Proof of insurance
• Lists of all assets – property deeds, car titles, and possessions
• Lists of all creditors – including contact information and account numbers

An Atlanta bankruptcy attorney will tell you exactly what documentation you need to present to the courts. Your Atlanta bankruptcy lawyer works with you in gathering everything required by the courts so nothing is missed.

Determining Chapter 7 Bankruptcy – If you and your bankruptcy attorney believe you’re a Chapter 7 candidate, you will be scheduled for a Chapter 7 Means Test. The Means Test determines if you qualify for debt discharge.

To qualify for Chapter 7 bankruptcy in Georgia, your income must be below the median income for the area as determined by the U.S. Census Bureau for 6 months prior to the filing.

As of March 17, 2008, Georgia Median Income is:

• $39,171 – single wage earner
• $51, 425 – two person household
• $58,885 – three person household
• $68,611 – four person household
• $6,900 – for each additional person over four

However, if your income exceeds Georgia Median Income, you might still qualify for Chapter 7 bankruptcy if, after deducting acceptable expenses from your income, you are unable to pay $6,000 ($100/month) to your unsecured creditors over 5 years.

Acceptable expenses include:

• Mortgage payments
• Utilities and necessary home repairs
• Car payments
• Registration, licensing, insurance, and maintenance of a motor vehicle
• Taxes
• Insurance
• Healthcare
• Child support
• Child Care
• School expenses up to $1,500 per year
• Mandatory payroll deductions

If your budget allows for payments of $6,000 ($100/month) or more in a 5 year period, you will be denied Chapter 7 bankruptcy.

A qualified Atlanta bankruptcy attorney can assist you with all the calculations to see if you qualify for Chapter 7 debt relief.

Determining Chapter 13 Bankruptcy – is a debt restructuring plan that allows for repayment of your debts over a 3-5 year period, giving you time to pay off your debts. In Chapter 13, you must propose a payment plan which provides for full payment of priority debts like taxes, child support, and student loans, but allows for partial payment of unsecured, or consumer, debt.

To file Chapter 13 bankruptcy you must have:

• No more than $1,010, 650 in secured debt (property that can be seized if payments aren’t made)
• No more than $336, 900 in unsecured debt (credit card or consumer debt)
• A stable job with disposable income (the income left over after bare necessity expenses like food, shelter, and utilities)
• You must also be able to pay – over time – at least the same amount the creditors would get if you’d liquidated your assets in Chapter 7.

If you decide you wish to pay off your debts, or do not qualify for Chapter 7, a bankruptcy attorney can help you determine what kind of monthly payment you can afford and help you file your payment plan with the courts.

Automatic Stay – once either Chapter 7 or Chapter 13 bankruptcy has been filed with the courts, you are granted an immediate Automatic Stay. An automatic stay prohibits creditors from making any direct contact with you or laying claim to any property or laying claim to any property. It also stops foreclosure proceedings, lawsuits, and collection action.

Trustees – You will be assigned a trustee by the court who takes control of all debts and property under Chapter 7 or arranges for your payments under Chapter 13. Many times these payments can be taken out of your wages. The trustee manages creditor payments, evaluates assets, and can challenge any part of the bankruptcy case. In Chapter 7, trustees sell non-exempt assets and distribute the proceeds to creditors.

341 Hearings – occur about a month after filing bankruptcy. You are required to attend this “first meeting of creditors”. Creditors may or may not attend.

Under Chapter 7 you meet with your trustee with all your paperwork. Here you answer any questions the trustee or any creditor may have, surrender any property, and/or reaffirm or redeem any property. If there are any amendments to be made to your claim, it’s done here.

Creditors have 60 days to challenge your right to debt discharge. If there are no challenges, in Chapter 7 bankruptcy you will receive notices that your debts have been discharged in approximately 3 – 6 months.

Under Chapter 13 you go over your payment plan with the trustee. Creditors are more likely to show up at a Chapter 13 341 meeting. You answer questions about how likely you’re going to be complete the repayment plan.

Atlanta bankruptcy attorneys are by your side every step of the way during the hearing to guide you through the process.

Chapter 13 Confirmations – involves a hearing before a bankruptcy judge. He or she will either approve or deny your repayment plan. Bankruptcy attorneys are with you every step of the way during the hearing to make sure your case goes through.

If approved, and you make all your payments on time, the remaining balance of your debts will be discharged at the end of your term – usually 3-5 years. You will be required to file annual reports showing your yearly income and expenses to prove you’re fulfilling your obligations.

This is a complicated process. You need a professional by your side. If you’re ready to talk with someone about your bankruptcy options, fill out our evaluation form, and talk to a bankruptcy attorney today.