Area of Law:
Filing for bankruptcy in Georgia provides you with a fresh start if you are unable to afford your monthly payments to your creditors, and you continue to fall further and further behind in your bills. If you file for bankruptcy in Georgia, you may have the option of filing for either Chapter 7 or Chapter 13 bankruptcy. Depending on your situation and whether you are eligible for Chapter 7 or Chapter 13 bankruptcy may determine which one you choose to file.
Chapter 7 vs. Chapter 13
Filing for Chapter 7 bankruptcy in Georgia may work well for you if you do not have many assets that you would like to keep following the bankruptcy. Chapter 7 bankruptcy is sometimes referred to as liquidation because your non-exempt assets will be sold and the money will be used to repay your creditors in their order of priority. However, to file for Chapter 7 bankruptcy in Georgia, you must meet the Bankruptcy Code’s eligibility requirements. To be eligible for Chapter 7 bankruptcy, you must earn less than the median income for the state, or you must have little disposable income remaining after paying your necessary expenses each month. As of 2011, the median income in Georgia is $39,694 for a single individual. If you earn more than the median income for the state of Georgia, the bankruptcy trustee will evaluate your disposable income. If you have a large amount of disposable income remaining each month, the court may feel that you have an adequate amount of disposable income to repay your debts without filing for bankruptcy. Therefore, the smaller the amount of disposable income you have remaining each month, the more likely you are to be eligible to file for Chapter 7 bankruptcy.
If you would like to keep your assets after filing for bankruptcy, consider filing for Chapter 13 in Georgia. Chapter 13 bankruptcy allows you to catch up on your debts by making monthly payments to the Chapter 13 bankruptcy trustee. During your bankruptcy proceeding, you will create a Chapter 13 repayment plan that describes how you will repay a portion of your debt to your creditors. To be eligible to file for Chapter 13 bankruptcy in Georgia, the court will want to see evidence of your income for at least the previous 6 months to verify that you will be able to afford your Chapter 13 monthly payments. However, the income can come from any source including spousal support, a pension, or Social Security benefits.
A bankruptcy discharge occurs at the end of your bankruptcy case, and is confirmation that the debts that were included as part of your bankruptcy case are now unenforceable. In a Chapter 7 bankruptcy in Georgia, you will receive notice of your bankruptcy discharge 3 to 4 months after you file the bankruptcy petition. However, if you file for Chapter 13 bankruptcy in Georgia, the court will not grant a discharge until the Chapter 13 repayment plan is complete. In addition, if you fail to make all monthly payments on time and in full each month to your Chapter 13 bankruptcy trustee, the court may dismiss your bankruptcy case, and you will not receive a bankruptcy discharge. Therefore, it is important to create a repayment plan that you can afford.
Filing for bankruptcy in Georgia is an important decision that will have a lasting impact on your financial situation. Therefore, it may be best to contact an experienced Georgia bankruptcy attorney, or the Georgia bankruptcy court prior to submitting your bankruptcy petition. The State Bar of Georgia's website http://www.gabar.org/communications/consumer_pamphlet_series/bankruptcy provides a lot of information about filing for bankruptcy. In addition, if you are considering filing for bankruptcy without the assistance of an attorney, visit http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyResources/FilingBankruptcyWithoutAttorney.aspx.