Chapter 7 Bankruptcy: Top Atlanta Bankruptcy Law Firm

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.

Both individuals and small businesses can find themselves with more debts than they can pay when due. In such cases, filing bankruptcy may provide a solution to what seems like an insurmountable problem. Bankruptcy law provides two basic forms of relief: (1) liquidation; and (2) rehabilitation, also known as reorganization. Most bankruptcies filed in the United States involve liquidation, which is governed by Chapter 7 of the Bankruptcy Code. A skillful attorney can advise individuals and businesses alike on whether Chapter 7 may be the right choice for them. The bankruptcy lawyer’s goals are to help debtors make a fresh start and ensure that creditors get paid.

Chapter 7 Bankruptcy Relief Is Available to Both Individuals and Businesses

Chapter 7 bankruptcies are the most common form chosen by individual consumers. In a Chapter 7, individual debtors liquidate their assets in order to be relieved of their debts. The Chapter 7 begins with the debtor’s filing of a petition with the bankruptcy court, which triggers the “automatic stay” – bankruptcy terminology for the termination of all debt-collection activity. The court appoints a trustee who oversees a Chapter 7 case and liquidates the debtor’s assets in order to pay off the debts. In many cases, however, the debtor’s assets are exempt or already subject to valid liens, so there will be no assets to liquidate. If there are assets, the trustee collects the sale proceeds in a fund from which the debts are paid to the extent possible. When all of the proceeds are distributed, any remaining unpaid debts are discharged, meaning that they no longer exist and the debtor has no further obligation to pay them. 

Business Chapter 7 Bankruptcy

“Commercial bankruptcy” is a remedy available to businesses that are unable to pay their debts. Chapter 7 business liquidations are conducted in significantly the same manner as Chapter 7 consumer bankruptcies. In other words, many of the business’s assets are sold and the proceeds are divided among the company’s creditors. When the debtor is a corporation, it ceases to exist after liquidation and distribution, and there is therefore no reason for further discharge because the creditors cannot seek payment from an entity that no longer exists.

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.
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How Chapter 7 Bankruptcy Works

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

If you decide to file for Chapter 7 bankruptcy then here is the process once your case has been filed:

  1. In about 30-45 days you will attend a court hearing. 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.
  2. In most cases, the Chapter 7 trustee will conclude the case and that is it.  You then have to wait a few months for your discharge to be entered.  Before the discharge date you will need to complete a second credit counseling course and file this certificate with the court. 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.

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.

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.

  • 1.

    Schedule consult

    Schedule an appointment & complete our short consult form so we can assess your financial situation.
  • 2.

    Meet with attorney

    Meet with an attorney either in-person or by video to review your options.
  • 3.

    Execute Documents

    You will review and sign off on all required docs (either online or in-person).
  • 4.

    Case is filed

    Your case is then filed and all creditors have to immediately cease all collections actions.

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 7 case you will be required to provide the last 90 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

When you file for bankruptcy you are required to list ALL creditors and provide their last know mailing address. It is very important that you list everyone in order to receive your discharge. Our firm will pull credit reports and perform a nationwide lien search but if there are any creditors (like medical bills or personal loans) that are not on your report we need to have their information.

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.

Saedi Law Group, located in Atlanta, Georgia, serves the cities of Atlanta, Newnan, Gainesville, Rome, Marietta, Duluth, Jonesboro, Decatur, Buckhead, Sandy Springs, Tucker, Stone Mountain, Lawrenceville, Roswell, Norcross, Alpharetta, Dunwoody, Conyers, Lithonia, Stockbridge, Douglasville, Peachtree City, Smyrna, Kennesaw, and Forest Park, as well as Fulton County, DeKalb County, Cobb County, Gwinnett County, Henry County, Clayton County, Fayette County, Forsyth County, Cherokee County, Douglas County, Newton County, Rockdale County, Hall County, and Floyd County, GA.

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.

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