Question: I owe $20,000 in credit card debt. Can I file for Chapter 7 bankruptcy?

Answer: The ability to repay your credit card debt will involve several factors:

1. Your income (weekly / monthly take home)
2. Your total debt
3. Your credit card minimum payment
4. Your credit card interest rate
5. Your other monthly expenses

Variable 1 – Your Income:
Your income is one of the biggest variables. It is alot easier for a person with a $75,000 income to repay $20,000 of credit card debt than a person with a $35,000 income.

Variable 2 – Your total debt:
In this case a $20,000 credit card debt may or may not be the big factor in determining if Chapter 7 is the best option. Other debt, including owning a home, a car and other goods. Under Georgia Chapter 7 bankruptcy you are allowed to keep just over $11,000 worth of goods, such as clothes, furniture, wedding bands and some electronics. In summary, you don’t want to have substantial valuable assets when considering if Chapter 7 is right for you. If you have assets that you are looking to protect, a Chapter 13 bankruptcy might be a better option. An Atlanta Chapter 7 bankruptcy lawyer will be able to tell you if Chapter 7 or Chapter 13 is best for you given your asset level

Variable 3 – Your credit card minimum payment:
Just keeping up with the credit card’s minimum payment can be a challenge. If the minimum payment is too high of a percentage of your monthly income, you may be in too deep. Also, if you can repay the $20,000 credit card debt over the course of 3-5 years, Chapter 7 bankruptcy might not be for you.

Variable 4 – Your credit card interest rate:
Your credit card interest rate can mean thousands of dollars over the course of repayment. You’ll want to both know what the interest rate is and how it is calculated. You might be able to negotiate a lower interest rate, thus avoiding a potential bankruptcy or transfer part or all of the debt to another credit card under more favorable terms. Credit cards are typically the highest interest rate a person has.

Variable 5 – Your other monthly expenses:
If your other monthly expenses are high, paying back the $20,000 credit card debt may not be possible. Your bankruptcy lawyer will discuss these other expenses with you and help frame how you can benefit from seeking bankruptcy protection.

With 20 years of experience and over 25,000 cases assisted, Berry & Associates is one of the most experienced group of Atlanta bankruptcy lawyers. Call us, or search the site to find a bankruptcy lawyer.

Example: A person owns $30,000 in credit card debt, rents an apartment
In this example the credit card debt is unsecured and since the person rents, instead of owning a home, he may find a Chapter 7 bankruptcy to be an appropriate route. This example also assumes that he does not have substantial valuable assets.

Exception: The person bought a home with 3.5% down in an FHA loan in 2009.
In this example the person has property, which could be at risk to be liquidated. While specific examples can vary, the person in this example likely does have a lot of equity in his property because of 1) he put 3.5% down and 2) the market have been flat, if not decreasing in most of Georgia since 2009. He may be a Chapter 7 candidate. Some areas have gained in value since 2009. Should his property value be higher, not underwater, and he has other valuable protectable assets, he may want to look at other bankruptcy options such as filing for Chapter 13.

What can I keep?
For those that file for a Georgia Chapter 7 there are some items that they can keep. Currently a person can keep just over $11,000 worth of goods, including household goods, clothes, furniture, wedding bands and some consumer electronics such as a personal computer.

Who isn’t a good candidate?
If you own a home with high equity, are a landowner, or have substantial assets and could cover a 3-5 year structured debt repayment plan, Chapter 7 may not be for you. For those in this situation, a Chapter 13 bankruptcy might lead to a better overall financial outcome. Check with you bankruptcy attorney if you have questions.

What’s Next?
Bankruptcy is a tough decision. Fortunately options exist to provide people with a new financial start. Since each situation is different, you may want to contact a bankruptcy lawyer before proceeding with a filing. A law firm such as Berry & Associates has the experience with a personal bankruptcy cases, including Georgia Chapter 7 claims. Contact us online or give us a call to see how we can help.

New Credit & Bankruptcy Filing Concerns: Be careful in what your new credit consist of up to 90 days before you file for bankruptcy. If you incurred new credit of $500 or more for “luxury goods or services” within the 90-day wind before your bankruptcy, or if you obtain a cash advance in the amount of $750 within 70-day period before your bankruptcy, the debt will not be able to be dischargeable.

• Be Watchful of New Credit Before You File Bankruptcy

Once you’re case has been official, in most cases the court will enter an Automatic Stay order which prohibits your creditors from taking or continuing any collection or legal action against you. To our clients, this is what they look forward to the most.

15 Day Mark: About 15 days after we’ve filed your case, the court will mail the Notice of Commencement of Case to you, Berry & Associates, and to all of the creditors listed in your petition. This notice will let us know the the date that the court has set for the meeting of your creditors, and the deadlines for your creditors to object to your case and file their claims against you.

30 Day Mark: Next, the 30 days after we file your case, or before the meeting of your creditors if that occurs first, you are required to file a Statement of Intention. Simply, this document will advise the court if there are items which you still have debt on that you intend to keep. The property which you decide to keep will serve as collateral for your other debts. Most of the clients that we work with at any of our Metro Atlanta Offices, decide to keep a car or even their house if our client is still able to keep up the payments. The court will also hold a Meeting of Your Creditors about six weeks after your bankruptcy case is filed. At least seven days before this meeting, you are required to provide a copy of your most recently filed tax return.

60 Day Mark: Around the 60 day mark after you’ve met with your creditors, you will receive your Chapter 7 discharge. Even if you receive your discharge, the trustee may, however, move to set it aside if you do not turn over nonexempt property or if you commit other bankruptcy violations.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 implements one last item from you before you’re eligible for your discharge, which is the financial education requirement. This requires you to complete an instructional course concerning personal financial management. We work with a number of providers which can refer you to an approved financial management class.

Berry & Associates has over 11 metro locations that can help with a local Atlanta Chapter 7 Bankruptcy case.

This office is easy to find. Just off of I-85, we are minutes for I-75 and GA-400. Open 6 days a week, including Saturdays from 9-1, this office is the number one choice for many seeking the help of an Atlanta bankruptcy attorney.

2751 Buford Highway
Suite 400
Atlanta, GA 30324
Tel: (404) 235-3328

When To File Chapter 13
Chapter 13 bankruptcy can be much better when you have an income and your home is in danger of foreclosure. Technically you can protect your home by filing Chapter 13. If you have enough of an income to continue paying on debts, you can protect all your assets here. You set up a debt repayment plan to pay back your monies owed over 3-5 years, stopping all collections, including any foreclosure, against you. If you file on time, you can save your home. If you have a job, this is a good option. If you have the income to continue paying off debts, and have a home, it can save you financially.

How Chapter 13 Bankruptcy Works
Chapter 13 bankruptcy is debt repayment plan, where you buy time to pay on certain debts and protect your property. It is not a magic pill; there are rules. You must have an income. You must pay on what you want to keep. And you must continue paying for several years. It costs you more money than Chapter 7, but you stand to save more assets.

How Georgia Foreclosure Works
If you file Chapter 13 bankruptcy prior to the foreclosure process beginning, you can save your home. If you wait too long, they may still be able to take your home. The secret is to file before the foreclosure papers are filed. So when you know you are not going to be able to pay, it’s time to consider filing bankruptcy.

Who Can Help?
If you’re unsure how to protect your Atlanta home from foreclosure, that’s okay. You simply need to consult with an experienced bankruptcy lawyer. It’s his or her job to help you understand how this process works, how you can protect your home, how you can protect other assets, what rules you have to follow, and how you can move on.

Your Chapter 7 Option
All bankruptcy discharges debt, just in different ways. Chapter 7 sells off some of your assets in order to pay back debts. You typically lose little, but save a lot of money. If you have a $50,000 medical debt, or a $100,000 credit card debt, or a mortgage you cannot afford after being laid off, you do have options. You can file Chapter 7 bankruptcy to discharge these debts. You may be wondering what you’ll lose. Few bankruptcy filers who follow all the rules lose many assets when it comes to Chapter 7 bankruptcy. Technically your home, car, and other valuables can be taken, but this is a rare and there are ways to protect them. You might discharge other debts and continue paying on your mortgage, for example.

Your Chapter 13 Option
Chapter 13 bankruptcy also discharges debt, but it’s debt you are paying back. You are not eliminating this debt like you are in Chapter 7 bankruptcy nor selling off assets; you are paying it off and not selling anything. If you have an income, Chapter 13 bankruptcy can be a smart option. You stand to protect your home from foreclosure, your car from repossession, your wages from garnishment, and having other valuables taken from you. In Georgia, where foreclosures are a major problem, Chapter 13 bankruptcy can buy you time to pay off your debts and keep your home.

Your Foreclosure Options
Where in some states homes are being foreclosed on at 1 in 800 per month, in Georgia the number is closer to 1 in 250. So every month 1 in 250 homes are being foreclosed on. How can you avoid this? We went over one of your options: to file Chapter 13 bankruptcy. If you file before the foreclosure process is started, the judge will put an automatic stay on all your debts – and this stops collections against you and a foreclosure. If you wait too long, you may still lose the home. You have another option involving Chapter 7 bankruptcy. You might discharge certain debts but continue paying – called affirming the debt – on your mortgage. This way you can both save money and keep your home.

Your Lawyer Options
You have far more options than this, but let’s close with your options in hiring an experienced Georgia bankruptcy lawyer. You can look online, such  as at the Georgia State Bar, found at GABar.com, where you can find many experienced bankruptcy lawyers. You want someone local. You want someone you can afford. And you want someone you can communicate well with. Bankruptcy can take some time. If you hire a lawyer you do not like working with, you can also fire him or her and hire another.

Chapter 7 to Cancel Credit Card Debt
While credit card debt is not the #1 cause of bankruptcy, it is a big one. Some of us are forced to use credit cards after losing our jobs. Others have poor spending habits. Some are trying to avoid losing everything. Credit card debt can be discharged in a matter of months with Chapter 7 bankruptcy. If you owe more than you can pay off in 3-5 years time, you may consider it. If you owe more than you make in an entire year, and you should be able to protect your property, you may should also consider it.

Chapter 7 to Discharge Medical Debt
Medical debt is the leading cause of bankruptcy nationwide. As noted, Georgia has some of the highest unemployment in the country, at over 10% by last count. Atlanta itself, as we all know, has thousands out of work and thousands more without medical coverage. If you have no medical coverage, get hurt, and have to go to the hospital, in a matter of days you can get a bill worth more than you make in a year. You might get a $50,000 bill for a bad infection, or a $100,000 bill for an injury to your child. Whatever the case, this is a time to consider Chapter 7 bankruptcy. It can discharge the debt in a matter of months.

Why not Chapter 13?
Chapter 7 bankruptcy is a liquidation: you discharge debt at some cost, because some of your assets can be taken to pay off the debt. Chapter 13 bankruptcy is debt repayment plan: you are paying off your debts, not eliminating them, and likely protecting your property. The problem here is if you have an impossible debt it’s pointless to file Chapter 13 bankruptcy. If you have no income, there is no point. On the other hand, if you own a home and have a job, but have fallen behind in bills, you may consider it.

When Not to File
If you are facing foreclosure, Chapter 7 bankruptcy may not be your best option. Atlanta foreclosure rates are quite high. In comparison to other states, Georgia has some of the highest foreclosure rates in the country. If you have an income, you may want to protect your home. Or if you owe a small amount, something you can pay off in a year or less, Chapter 7 may not be your best option.

Get Legal Help
No matter what, file Chapter 7 bankruptcy with the help of an Atlanta lawyer. There are thousands of capable Georgia bankruptcy lawyers. You can find them at the GaBar.org, the State Bar of Georgia, and on sites and blogs like this one.

First, let’s explain generally the most common reasons for a bankruptcy denial.

-Credit counseling is required before filing, so if you don’t you can be denied.
-You need not make things up; if you lie on forms you can easily be denied.
-You also should not try to hide property; write down any asset you want to keep.
-You do have to pay the $299 fee for Chapter 7 or $274 for Chapter 13, so failing to pay results in a denial.
-The 341 meeting, also called the meeting of creditors, is a requirement. If you fail to show up, you will be denied bankruptcy.
-Finally, if you are filing Chapter 13 bankruptcy, and fail to keep up with your repayment plan, it can lead to your filing being denied.

Credit Counseling Requirement
180 days prior to filing Chapter 7 or Chapter 13 bankruptcy, you must go through credit counseling. It should not be a difficult process.

Don’t Lie
By lying on bankruptcy forms, you are committing bankruptcy fraud. While you may want to hide certain monies or income, you need to be honest if you want help. Lying does not help your situation.

Property
You also commit bankruptcy fraud if you try to hide property. This is public record, and you are quite often found out. In general, if you want to keep a property, much like if you want to discharge a debt, you list it in your bankruptcy. You risk problems if you don’t. While you may want to keep certain properties out of the equation, it’s important to be honest here if you truly want help.

Paying Bankruptcy Fees
Well, this is an easy one, but by filing bankruptcy, you are admitting to some financial problems. It may be hard to pay bankruptcy fees, namely the filing fees for Chapter 7 and Chapter 13. If you can come up with the money, it quite often saves you 20-50 times the money or property you would stand to lose.

The Meeting of Creditors
The meeting of creditors is not a big deal: you will rarely have huge arguments. Creditors rarely even show up. But if you fail to make it, it can delay your bankruptcy if not stop it.

Keeping up with Chapter 13 Repayment Plan
Paying your debts may seem impossible, or protecting your property may not seem to be an option. If you file Chapter 13 bankruptcy, you stand to save a lot of money and assets. If you feel it will be too hard to keep the debt repayment plan going, you may reconsider sticking with it. On the other hand, if you get into it and can no longer afford to keep it up, you may consider other options.

The problem with credit counseling agencies is simple: they often warn you of bankruptcy. Well, there are many, many reasons to file bankruptcy in Georgia, a state with unemployment rates higher than the national average as well as 1 in 250 homes going into foreclosure every month. Chapter 7 bankruptcy, specifically, can literally change your life. How so?

Bankruptcy Saves You Money
This may seem quite obvious – of course bankruptcy saves you money! – but many overlook bankruptcy, thinking it’s not an option. You pay $299 to file Chapter 7 bankruptcy. You should hire a lawyer, but even then you are paying a low fee for help which can save you tens of thousands of dollars.

Bankruptcy Gives You New Chances with Money
If you in over your head with debts, you may wonder what to do. Even if you have a good job, if your debts are such that you cannot pay them off in 3 years, consider Chapter 7 bankruptcy. The point here is, it may be easier on your credit to discharge the debt and start fresh. While it may sound odd, if you owe a $20,000 medical bill, a bank lender may have more concerns about loaning you money; if you owe little to nothing, you may have a better chance of getting a loan. Bankruptcy does not help your credit, but neither does it ruin it.

Bankruptcy Allows You to Discharge Impossible Debts
If you owe a $100,000 medical bill, for example, and make $40,000 a year, you have an impossible debt. It’s more than you might make in two years. As noted, if you cannot pay something off in a reasonable amount of time on your own, if it will hamper your life greatly, you may consider Chapter 7 bankruptcy. You can only file every six years, but if you do it right you won’t have to file again.

Chapter 7 Bankruptcy is Cheap
And if you pay a lawyer $1,000 and pay the $299 filing fee $1,299 to discharge that $100,000 medical bill, or whatever it is, it’s more than worth it.

Chapter 7 Bankruptcy Gives You a Fresh Start
Finally, bankruptcy is a second chance at a new life. It will not solve all your problems, you will have to change some things, and you won’t end up rich, but you can get a fresh start with money. Maybe that’s enough.

To Stay Positive
Mentally, staying positive is hard when challenged by extreme debt or a mortgage you cannot pay on. How do you stay positive before bankruptcy? Look at how much you stand to save, focus on what you want to keep , and set goals on where you want to be in 3 or 5 years time. Look to the future, in other words.

To Get the Right Lawyer
Georgia bankruptcy law is complex. For example, if you file Chapter 7 bankruptcy, your home exemption only covers so much. If  you file Chapter 13, you need to spend some time developing a repayment plan. The right person to help is an experienced Georgia bankruptcy lawyer. His or her job is to help you make key decisions and reap the rewards of bankruptcy.

To Be Eligible for Bankruptcy
Are you eligible? Well, it depends on what you make in one case and what you owe on the other. For Georgia residents, if you make more than the median income of our state, you may not be eligible for Chapter 7 bankruptcy. On the other hand, if your income recently took a nose dive – perhaps because you’ve been laid off – you do have the opportunity to file Chapter 7. With Chapter 13, you are almost always eligible, but it can be challenging if your debts run into the hundreds of thousands.

Choosing Chapter 7 or Chapter 13
Which form of bankruptcy should you choose? Sometimes the choice is made for you by your income: you make too much for Chapter 7 so you have to file Chapter 13. This can be challenging when you owe tens of thousands of dollars. On the other hand, with an income and a plan, you stand to protect all your assets and also save money.

Liquidation
Chapter 7 bankruptcy is a “liquidation” where your main debts are discharged and your assets are sold off to pay these debts. The challenge for filers is keeping property. Few lose a lot in Chapter 7, but it does happen. If you have a  lot you may lose, such as a home, consider Chapter 13.  However, if you’re faced with a huge medical and/or credit card debt, how good would it be to have that disappear? That’s what Chapter 7 can do.

Foreclosure
Finally, one of the biggest challenges any of us face is getting a home and keeping it. If you have a family, it may feel like a nightmare when you cannot pay your mortgage. The challenge here is to protect your home, and a Chapter 13 bankruptcy can do just that. First, you do have property exemptions, which cover about $10,000 for one person and $20,000 for a couple, but you can protect your home by law with a bankruptcy filing. If you have some income, you can start making affordable payments with a Chapter 13 debt repayment plan – keeping your home.