Factors to Consider for Filing Chapter 7 Bankruptcy
As you consider filing bankruptcy, you must account for the type and amount of debt you have and for which type of bankruptcy to file in order to best resolve your financial crisis. Chapter 7 is the most frequently filed for and fastest type of consumer bankruptcy. Known as “liquidation” bankruptcy, Chapter 7 allows you to liquidate your assets to remove the burden of your legal responsibility for dischargeable debts. You don't have to lose all of your property in Chapter 7 — experienced Chapter 7 bankruptcy attorneys in Atlanta can help you maximize the benefits of this type of bankruptcy filing.
Qualifying for Chapter 7
Those who benefit most from Chapter 7 relief have high consumer debts and minimal assets. To qualify for Chapter 7, you must pass a means test. The means test compares your family income (for six months before filing your petition) to the median income for the same size family in your area. If don't pass the means test because your income is too high, you must file for Chapter 13. The current median income for a family of two in Georgia is $51,954.
When you file for Chapter 7, some of your property can be exempt or excluded from liquidation. Georgia law allows a homestead exemption of $10,000 and 100% of payments from certain benefits, including Social Security, veterans and other retirement, unemployment and alimony. The exemptions also allow you to keep up to $3,500 of the value of a motor vehicle. Other personal property up to $300 per item and not exceeding $5,000 ― such as clothing, books, religious items, utensils and pictures ― are exempt from bankruptcy. If the value of your property exceeds the allowable exemption amounts, you may not want to file under Chapter 7.
Chapter 7 will not discharge ― remove your legal obligations ― for certain types of debts, including the following:
- Debts incurred just prior to the bankruptcy
- Most student loans
- Most tax debts
If you are considering filing for Chapter 7 bankruptcy in Georgia, contact the dedicated attorneys at DebtStoppers, Bankruptcy Law Firm Robert J. Semrad & Assoc., LLC. Let us guide you on your journey to a fresh financial start.