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The Changes from the New Bankruptcy Law for Georgia Chapter 7 Filers

jmalewitz — Thu, 29 Jul 2010 04:29:31 +0000

In 2005, a new bankruptcy law came into effect with some key changes you need to be aware of in order to successfully file. This blog guide focuses on the changes for Georgia Chapter 7 filers. If you have questions about filing Georgia bankruptcy you need to speak with an experienced lawyer.

Main Points
In short, the new bankruptcy law has made it more difficult to file Chapter 7 bankruptcy, with the option of filing with a Chapter 13 plan instead. This is based on how much you make. Prior to the new law, you had the option between Chapter 7 and Chapter 13. The most common form to use was Chapter 7, because you could literally discharge thousands of debt and lose nothing. Chapter 7 is still very common, but less so. There were also some changes made to how Chapter 13 filers, mainly based on giving you less disposable income to live on.

How do you know if you’re eligible?
Under the new bankruptcy laws, you must be below the average income for a family your size. So for Georgia filers, if you make more more than the median income for Georgia residents, you would have to file Chapter 13.

Accordingly, the more you make the less chance you have of being eligible. Here is a quick list as of April 2010 of the current median income.

Family Size 1 – Median Income $40,546
Family Size 2 – Median Income $55, 061
Family Size 3 – Median Income $60,887
Family Size 4 – Median Income $68,258
Add $7,500 for further family members.

If you are below, you are eligible for Chapter 7; if not, you must file Chapter 13. This obviously has been the law for many years, but many are unaware of the significant changes involved. So the higher your family income, the less chance you have of being eligible. You will have to go through a “means test” when you file, so if you’re unsure that can help.

What This Means for Costs
Because filing bankruptcy is now more difficult, lawyers are adapting their prices to the new time issues. It can take much more time to successfully file. While Chapter 7 bankruptcy is usually a quick process, the new means tests for eligibility make the paperwork somewhat more time consuming. It’s still very valuable to hire an experienced Georgia bankruptcy lawyer.

Getting Help
A professional lawyer can help you navigate these laws. Yes, the costs may be more, but don’t forget the benefits of filing, even if you can’t file Chapter 7. In Chapter 7, the majority of your unsecured debts, such as credit and medical debts, can be discharged completely. If you pay your lawyer $2,000 to successfully file, and discharge $50,000, you’re ahead by a lot of money. If you still have questions, a Georgia bankruptcy lawyer can help you with points such as eligibility, and also help you file Chapter 13 if needed.

Downfalls of Bankruptcy Alternatives

jmalewitz — Fri, 11 Jun 2010 19:34:52 +0000

Bankruptcy is clearly not for everyone, but sometimes the alternatives to filing have too many downsides. Instead of dong nothing, working with debt counseling agencies, or stopping creditor harassment yourself, you should be aware of the benefits of filing Chapter 7 or Chapter 13 bankruptcy.

Advantages of Chapter 7
Chapter 7 bankruptcy is also not for everyone, but it’s your best option in certain cases. If your problem is high debts you simply cannot pay back, you can discharge most common debts. This includes the big 3: medical debt, credit card debt, and mortgage debt. Also, you can stop creditor harassment, negotiate with your trustee to keep certain assets, and get a fresh start.

Advantages of Chapter 13
Chapter 13 bankruptcy is used about 25% of the time, while Chapter 7 gets the majority at 75%. Why? This is because you don’t discharge debts with Chapter 13; you pay back all debts. However, you also get to keep all your possessions. Technically, you may lose your home via Chapter 7, while Chapter 13 can effectively stop a foreclosure. If you discharge mortgage debt with Chapter 7, you can lose the home, but with Chapter 13 you are allowed to make payments you can afford.

Now let’s go over the downfalls of the alternatives to filing bankruptcy.

Stop Creditor Harassment
There are laws in place where you can stop creditor harassment without filing bankruptcy. If you only want to stop the harassment, writing a letter to your creditors asking them to stop contacting you can stop the harassment. However, you are still liable for all these debts. The point is you stop the harassment, but you still have all these debts and may run into foreclosure, repossession, and credit problems.

Negotiate With Creditors
You can also work with creditors yourself. Some may be willing to renegotiate your payments. You may be able to sell some assets to pay them. If you have no income coming in, however, this just won’t work. If you cannot afford these debts, negotiating with creditors may be next to impossible. Chapter 7 is a better alternative.

Debt Repayment Plan
There are many agencies out there who can help you negotiate with creditors if you’re uncomfortable with negotiating. The problem again is you may not be able to negotiate at all; some creditors simply won’t respond. Other times, you won’t be able to afford the payments, even lowered.

Debt Counseling
This alternative to bankruptcy, specifically Chapter 13, has the most downfalls. Many go into debt counseling thinking it will solve their problems. It works much like Chapter 13 bankruptcy, in that you create a plan where you can pay off debts. The difference is, if you fail to make just one payment, your creditor can stop the plan. With Chapter 13, you are protected by law from such an event.

Bankruptcy sometimes sounds like a total life change. Yet in most cases you lose nothing. Yes, it stays on your credit report, sometimes you can handle creditors without it, but by law Chapter 7 and Chapter 13 bankruptcy protect you far more.

Process for Chapter 7 Bankruptcy – What Does the Trustee Do?

jmalewitz — Wed, 19 May 2010 19:58:31 +0000

What bankruptcy trustees do, how they effect your bankruptcy, and how you can handle one can be complex. That makes it important to get the right attorney to help you through this process. You can hire an attorney: online, in the phone book, and through referrals. For Georgia residents, you can go to the State Bar of Georgia, or search “Georgia bankruptcy lawyers” online.

Now, let’s answer some key questions.

What is a trustee?
The trustee is a court-appointed individual who will pay your creditors on what you owe them. The trustee, and potentially the staff, will be charged with the Georgia court to examine your papers, and liquidate nonexempt property.

What is nonexempt property?
Exempt property you get to keep. Nonexempt property can be sold by the trustee. In some cases, your home may be exempt, depending on its value. Other times, valuable assets like your home and car can be considered nonexempt and sold to pay off creditors.

What will you lose?
Studies on bankruptcy clearly point out how trustees often sell nothing you own. Most or all the property is very often considered exempt and will not be sold. If you own a lot of assets, especially expensive ones, you may consider filing under Chapter 13 bankruptcy to keep your property.

What do creditors do?
The creditors will stop calling you after you file bankruptcy. There is no point. In some cases, they can appeal the case, especially if an automatic stay is issued. What is an automatic stay? That’s where the seizing of assets such as homes can be delayed by law.

Typically, creditors have few powers once you file Chapter 7 bankruptcy. On the other hand, in Chapter 13 bankruptcy,they stand to be paid back for your debts.

What’s Chapter 13 bankruptcy?
Since we’ve mentioned Chapter 13 several times, let’s highlight it. Chapter 13 bankruptcy is different than Chapter 7 in that you pay back debts. Also, a Chapter 7 bankruptcy takes months, while Chapter 13 takes 3-5 years. The advantage with Chapter 13 is if you fear losing expensive assets or your home going into foreclosure, it can effectively save stop it.

What’s better?
Chapter 7 and Chapter 13 each have their own advantages, and more often than not the choice is based on need. If you file Chapter 7, you can eliminate large amounts of debts. If you file Chapter 13, you can save all your assets.

The Final Step
Handling a trustee and choosing between Chapter 7 and Chapter 13 bankruptcy is cause to hire a professional. This means a Georgia personal bankruptcy attorney — who is the most valuable asset you have in bankruptcy.

You Can Keep Your Stuff In Chapter 7 Bankruptcy

admin — Mon, 15 Jun 2009 15:26:20 +0000

Often you can file a Chapter 7 bankruptcy in Atlanta, Georgia and still retain your home, car and other significant assets. This will be accomplished by utilizing the rules regarding exempt assets vs. non-exempt assets.

All non-exempt assets must be turned over to the bankruptcy trustee managing your bankruptcy case, while exempt assets are excluded from the bankruptcy filing and are therefore retained by the debtor.

Exempt assets may include furniture, appliances, clothing, and any tools that are used in the debtor’s employment.

The assets that can be considered exempt vary significantly from state to state. In order to ensure that you fully exercise these property exemptions, it is recommended that you consult a Georgia chapter 7 bankruptcy lawyer.

Other secured assets may be excluded from the bankruptcy if the debtor pays the creditor an amount equal to the value of the property, even if the amount of the debt is more than the value of the item.

Your creditors may object to your Chapter 7 filing. When this happens, you will often need to negotiate a payment plan with that particular creditor or convert your filing to a Chapter 13 bankruptcy. For this reason, it is highly recommended that you consult a qualified Georgia Chapter 7 bankruptcy attorney.

In a Chapter 7 case, you will be required to attend one brief court hearing. This is an opportunity for your creditors to file any objections or additional claims related to your case. If there are no objections, a discharge order will be issued for your debts.