Filing bankruptcy in Georgia: Step-by-step process for chapter 7 and 13

filing-bankruptcy-in-georgia

Filing bankruptcy in Georgia is a complicated process. However, before 2005, filing for bankruptcy in the USA was a breeze. The flow of money was easy and lenient bankruptcy rules made oneself declaring bankruptcy an easy way to get out of the mess.

The 2005 bankruptcy act changed a lot of that. This law was aimed at weeding out those candidates who were using bankruptcy law to splurge and then escape from their extravagant lifestyle out of lenders money.

Chapter 7 is one of the most commonly used bankruptcy proceedings, especially by retail consumers. It’s easy to escape route for some because it allows you to keep your modest home as well as a basic vehicle for commuting to the workplace so that your life doesn’t freeze after getting discharged.

Bankruptcy Act 2005 brought a significant legislation in chapter 7, i.e. the “Means Test”. In chapter 7, if you do not pass the means test, then in all probability the court will refer you to chapter 13.

The government got strict with debtors who splurged money willingly because they had the safety valve of bankruptcy act in their consciousness. Through the 2005 Act, it was made mandatory to be regular in tax payments in the preceding years with supporting documents during filing of the petition.

Bankruptcy Act 2005 took away some of the illogical legal covers that the petitioner got, after filing for bankruptcy.

Even if a person files for chapter 7 or 13, he is no more immune to proceedings from child support, divorce or alimony arrears. Eviction notice also does not get an automatic stay. Drivers license suspension is also not stayed automatically.

Georgia bankruptcy courts in Southern, Northern and middle districts

Bankruptcy Court in Georgia

The northern district bankruptcy court of Georgia is located in Richard B Russel building on 75 Ted Turner Drive, South West Atlanta, GA 30303. The office hours usually start at 8.00 AM.

The southern district bankruptcy courts of Georgia serves 43 counties of Southwest Georgia. Here is a summary of the main bankruptcy courts of the southern district of Georgia.

The courthouse is located in 600 James Brown Boulevard in Augusta.

In Brunswick County, the bankruptcy court is located in 801, Gloucester Street.

In the county of Dublin, you can file your bankruptcy petition in the court on 100 North Franklin Steet. You will find Sothern District bankruptcy courts of Georgia, covering respective counties, in Savannah, Waycross & Statesboro.

Middle district Georgia courts are in Columbus and Macon counties.

Bankruptcy act credit counselling

The 2005 bankruptcy act made is mandatory for those filing for bankruptcy to undergo the “credit counselling course”. It’s completed through federally approved agencies. You need to take this course before filing for bankruptcy petition. It was no more a voluntary decision but a rule, if bankruptcy under chapter 7 or 13 was aimed for.

We all know that the Bankruptcy Act 2005 has made completion of credit counselling course mandatory for filing bankruptcy in Georgia.

These credit counselling courses are offered by agencies approved by the bankruptcy administrators for different states. In other words, federal agencies need to approve and regulate the courses. You can choose the credit counsellor, available for your State and county, from the federally approved list.

During the course, counsellors or support staffs are available till midnight to answer your queries. However, do check the timing of support personnel availability and timings for respective agencies.

You need to go through the whole course in the prescribed format first. Then, the counsellor will interview you either online or via phone. If the counsellor is satisfied that you have completed the course successfully and effectively, you will be immediately issued an online course completion certificate.

Please note that if you want to get a hard copy of the course completion certificate, you have to pay for the certificate and the postal services.

Credit counselling course fees

The credit counselling course is not free just because you are declaring yourself bankrupt. The fees normally are around 15 dollars. However you are eligible for partial or full waiver of course fees if :
• Your income is below a certain percentage of the poverty line. The “US Health and Human Services” determines the poverty line income in dollars 
• Your family size plays a role in reviewing the counselling fees waiver decision.
• Last but not the least is the actual factor, i.e. your household income.
• State of residence has to be mentioned, as the waiver rule varies state to state.

These 3 data points are factored in to decide whether you are eligible for a partial waiver of 3 dollars or a full waiver, or none.
These details have to be filled up in the waiver form and submitted for approval, online.

You may receive a partial waiver if you have already paid
• 500$ to your attorney as legal charges
• You have assets worth 2000$.

Otherwise, depending on your meagre income, several times below the poverty line, or your large family size versus your low incoming revenue, may allow you a full, waiver.

The decision of whether you get a cut on the Credit Counselling fees is decided and relayed to you within 72 hours.
The credit Counselling course is available for 24 hours, 365 days a year. The counselling agency website states the medium of course presentation. You may take it over the phone. However, the preferred mode is via the internet, for completion of this course.

Chapter 7 bankruptcy Georgia means test

One of the most meaningful changes that the Bankruptcy act 2005 brought in Chapter 7 and 13 was the means test.

This test helps the deserving debtors ( deserving from the bankruptcy angle) get the benefits of these two acts. ” Means” stands for Median Income. As the name implies, means test is based on the median income for a particular state. In 2016, the median income of Georgia was $53,559.

Next, you need to calculate the current household income. The “current income ” is actually the preceding six months average household income. If the income is below the Median Level, you are eligible for chapter 7 without any fuss.

However, if you fail the means test, then your disposable income is calculated. In this, your normal income over the last six months is weighed against all your debts and your normal expenses.

Does your disposable income exceed 100 $? Well, this means that you can repay some part of your debt every month. In that case, the court will consider you for filing chapter 13 bankruptcy.

In the case of chapter 13 bankruptcy, the method is the opposite. Here the calculation is done to check if you have enough disposable income for repaying a part of the incurred debt.

Whether its chapter 7 or chapter 13 bankruptcy, some points are common for successful enrollment.

Let’s check the common points for the filing of chapter 7 and chapter 13.

Tricks for filing bankruptcy in Georgia

There should be no tax arrears for preceding six years. If the case is so, you have to clear the dues and obtain the relevant all-clear tax certificates. It should be to be provided along with your bankruptcy petition.

In both the cases, for filing bankruptcy in Georgia, there should be no rejected bankruptcy petition in preceding 180 days.

When you file for either of the chapters you get an automatic stay. However, this stay does not legally protect you from alimony matter, child support or tax arrears proceedings.

Bankruptcy filing helps to automatically stay the following by Automatic Stay:

  • Foreclosures
  • Vehicle repossession
  • Legal suites
  • Phone calls for payment
  • Credit card missed payment messages and calls
  • Reminders and complexities from non-payment of medical loans
  • Legal suites

One common blot is the record of bankruptcy that stays and ruins your credit ratings. Chapter 13 stays on credit ratings for seven years, whereas it stays for 10 years in chapter 7. However, a chapter 7, helps to drastically prune the existing loans. Hence, servicing the remaining ones become much easier and your credit score starts reviving soon.

The Trustee board or the bankruptcy judge can reject the bankruptcy petition in the following cases: 
• You had gone on piling on loans, even while you were unable to repay the older ones
• Successfully hiding older loans while applying for new credit
• Had assets to repay your debt but hid this knowledge from creditors and sat mum

In such case, you are not perceived as being bankrupt by luck but by wilful means to take advantage of the law.

How is chapter 7 bankruptcy in Georgia different from chapter 13?

Chapter 13 is all about trying to keep your business assets and property through repayment over a longer period of 3-5 years. Whereas, chapter 7 is all about non –repayment.

In chapter 13, you have to give a firm commitment to repay as per the approved plan. Whereas, chapter 7 helps to discharge all your debts by auction, selling of non-exempt assets.

341 Meeting of creditors

341 meeting of creditors
Source: https://www.maxpixel.net/Chatting-Team-Business-Meeting-Office-Informal-1702638

In chapter 13, one crucial aspect is the creditors meet or 341 meeting of creditors.

Here under oath, you answer all the queries from the trustee board and the creditors.

The idea is to get a crystal clear true position of your financial mess and the probability of repaying part of the loan over a longer tenure of 3-5 years or more.

If the lenders and the trustee board feel that you really have that steady income source and cash flow, which will enable to have a disposable income enough for monthly repayment in future, they are likely to go ahead with your restructuring.

There can be multiple creditors meet to finalise your restructuring plan. In these meets, the bankruptcy judge is not apart.

After all the terms are finalised in this 341 meeting of creditors, the bankruptcy judge hears the case and decides whether to okay the chapter 13 or not.

 

 

Once a bankruptcy judge okays chapter 13, the instalments, as planned, are paid to the trustee next month onwards. Trustee distributes it to the priority creditors like tax agency, and for child support, alimony, legal and administrative fees, secured creditors and lastly to the unsecured lenders.

Every federal state can have its own set of exemption ca follow the federal guidelines in case of chapter 7. The state of Georgia has its own set of exemptions. Let’s go through the exemptions

Chapter 7 bankruptcy Georgia exemptions

• The amount by which your home equity exceeds $21,500 for a bachelor and $43,000 for a family is non-exempt in chapter 7.
• 25% of your income is eligible for garnishment (i.e. in simple terms non-exempt) in chapter 7. The amount of wage that is greater than 30 times of minimum wage also is non-exempt.
• The aim of chapter 7 is to leave you with a minimum amount of enablers so that you can start a new life. For those bare necessities like a small equity value home, a budget automobile is exempt. However, cars above $5000 value are non-exempt.
• Following the same logic any personal, belonging below 300$ total value or 5000$ total value is exempt.

FAQ:

How much does it cost to file bankruptcy in Georgia, ga? 

  • The cost of filing bankruptcy in Georgia for chapter 7 and 13 is 335$ and 310$ respectively. Check whether it includes the administrative expenses. There can be the additional cost of 15-20$ for trustee board functioning. You can pay the fees in 3-4 instalments, only if the trustee board allows it after evaluating your financial position.

This concludes this article on Chapter 7 and Chapter 13 bankruptcy filing in the State of Georgia. The legal process is full of different logics, which only a well-versed bankruptcy attorney can take advantage of. You may be tempted to opt for a DIY-bankruptcy filing. However, surrender to your bankruptcy attorney with all documents and facts, so that you get the best possible deal and can start afresh in the best possible way.

References:

Bankruptcy – Debt.org

Uscourts – Bankruptcy

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David Galler is an experienced bankruptcy attorney based in Atlanta, Georgia. For the last 29 years he has filed over 10,000 bankruptcy cases. He has a FIVE STAR client rating on Avvo, Kudzu.com, RateABiz.com, and Google+, among other sites. Over 99% of all Chapter 7 cases he filed have been discharged.

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