One of the best ways to eliminate unsecured debt is Chapter 7 bankruptcy. For Atlanta residents, Chapter 7 has many advantages. You can halt all collection efforts. You can eliminate debts you simply cannot afford. If you fear assets may be taken or other legal action will ensue, you can be protected under law. There are some disadvantages too. This will be a mark on your record for 10 years. You won’t be able to file again for 8 years (or 6 years if you filed Chapter 13 first). Some assets by law can be liquidated in order to pay back some of these debts; assets like a home and car are rarely included, but it happens.

Atlanta Chapter 7 bankruptcy isn’t always your best option. Sometimes filing Chapter 13 bankruptcy has more advantages. As long as your unsecured and unsecured debts are not too high, you are eligible to file, where you may not be eligible for Chapter 7 if you make too much money. If you have a lot of assets, if you’re home is in danger of foreclosure, you can keep these assets and pay debts in manageable installments.

How does Chapter 7 liquidate assets?
You will be charged with a Georgia bankruptcy trustee who will oversee your case. This trustee has the power to sell assets. However, few will lose anything: the great majority of Chapter 7 filers lose no assets. So don’t be afraid of losing your home and car. By following the laws and hiring an Atlanta bankruptcy attorney, you can save assets and discharge debt.

Will all unsecured debt be discharged?
No, the big three debts most people have are credit card, medical, and mortgage. These debts can technically be discharged, though you may lose the home if you do not pay on it. Say you have $20,000 in credit card debt; in this case, filing Chapter 7 bankruptcy can discharge these debts in a matter of months. Or say you have $50,000 in  medical bills; once again, filing Chapter 7 can eliminate these debts.

Debts you can’t discharge include alimony, child support, and back taxes. These are unsecured debts, but by law you have to pay them.

How much does it cost?
Chapter 7 bankruptcy is very reasonable for Atlanta residents looking to eliminate debts. You pay only $299 to file with the court. You should also hire a lawyer. A lawyer will cost more, from $1,000 to $2,500 depending on the time involved for your case.

Why a Lawyer?
There are hundreds of Atlanta bankruptcy lawyers who can help you, but not all are equally experienced and have fair prices. You need a professional, experienced lawyer who will walk you through this process. A lawyer actually saves you time and money, allowing you to discharge the most debt in a timely manner.

A common question we hear is, what common debts can be discharged by filing bankruptcy? The advantage of bankruptcy, especially personal Chapter 7, is that you can eliminate the majority of your debts in a matter of months. However, you must be eligible, certain debts cannot be discharged,and you may lose assets.

What common debts can be discharged?
In some cases, you can discharge almost all of your debt. There are some debts you cannot discharge, including: taxes, alimony, and child support. However, you can technically discharge your mortgage, car payment, credit card debt, medical bills, and some other debts you owe.

Bear in mind, when you discharge debts, it’s not a free deal. While most of the time you can discharge debts, those debts come with a price. If you discharge your mortgage, your home will most likely be taken. If you cannot stay current on your home, you may have no other choice. If you discharge your car, technically this can be sold as well. This is Chapter 7 bankruptcy law, so let’s go over that and how Chapter 13 can help you.

Why file Chapter 7?
Chapter 7 bankruptcy is a liquidation. The biggest benefit is getting a fresh start. You may lose some if not many assets, but in most cases you lose nothing and discharge thousands if not tens of thousands in debt. If you file Chapter 7, creditors have no more reason to contact you. A common Georgia debt is credit card debt, and with Chapter 7 bankruptcy you can discharge all your debt for a minor loss.

Why file Chapter 13?
Chapter 13 bankruptcy on the other hand has the opposite effect: you do not liquidate your property. You want to keep your property in most cases. Sometimes you may not be eligible for Chapter 7 and be forced to file under Chapter 13. Why? If you make too much, the current Georgia median income is how this is factored in, you won’t be eligible for chapter 7.

Now, Chapter 13 has many advantages. You’ve been paying off your home for years if not decades. You love the place, but fear foreclosure is on the horizon. Now is the time to act, because if you wait to long and the bank forecloses, you have little choice but to let them take it. If you act beforehand, if you hire an attorney and file under Chapter 13, you can save your home and car. This works well if you have the money, a job, and can afford to keep up with the payments. Chapter 13 allows you to pay debts over a 3-5 year span, keep your car and home, and rebuild your finances.

Why not do nothing?
In some cases, people do nothing because they have nothing. While this strategy may seem odd, it does work in some cases. If you have lots of debt but few assets, it’s an option. However, most will want to take action immediately. Doing nothing can be very dangerous, though it’s an easy step.

What should you do? We recommend you consider your personal bankruptcy options, hire a lawyer, and immediately act to protect your financial future.

The Means Test
NOLO.com, a good reference for bankruptcy laws and codes, has what’s called a “means test” for bankruptcy filers in any state. All you have to do is use their calculator to see if you’re eligible. You type in your zip code for Georgia or any other state and they ask a few more questions. You can find it at http://www.legalconsumer.com/bankruptcy/nolo/

Why does income matter when filing bankruptcy? With new bankruptcy laws, sometimes you are not eligible for Chapter 7 bankruptcy in Georgia if you make too much. If you make too much, but owe a lot and have little disposable income, you have options.

How does eligibility for Chapter 7 bankruptcy work?
In more detail, if you cannot file Chapter 7 bankruptcy you do have the option for filing under Chapter 13 bankruptcy. Say you live in Atlanta and have high credit card debt, you’re behind on your mortgage, but you have a good job and enough money to stay afloat. In this case, you might not be eligible for Chapter 7 bankruptcy but you still have Chapter 13 bankruptcy as an option.

How Chapter 7 Eligibility works
If your income for a household of your size is lower than the median income for a Georgia home, you can file for Georgia Chapter 7 bankruptcy. If your income is higher than the average for a household of your size, you likely will only have Georgia Chapter 13 bankruptcy as an option.

Say you live by yourself, have debt over $200,000, have a car and a home, and you make $100,000 a year. This sounds like you have a lot of disposable income. Basically, you make too much. In this instance, you might make too much and be forced to use Chapter 13. This isn’t always bad. There are key advantages to filing under Chapter 13, such as the opportunity to keep your Georgia home and car if you stay current on payments.

How Chapter 13 Bankruptcy eligibility works
If you make too much money for Georgia Chapter 7 bankruptcy, it may not actually be bad to file for Chapter 13 bankruptcy. These are two very different bankruptcy options. For one, with Chapter 13 bankruptcy you have more of a chance to keep assets such as your home and car. If you are behind on mortgage payments for your Georgia home, you can get extra time to catch up after filing Chapter 13 bankruptcy.

Ask a Professional If You’re Eligible for Georgia Chapter 7 Bankruptcy
In any case, ask a professional bankruptcy lawyer if you’re eligible. Over the next decade, bankruptcy law may change even more. If you are unsure of things such as disposable income, and the advantages of Chapter 7 and Chapter 13, a good Georgia bankruptcy lawyer can help.

Before You File Atlanta Chapter 7 Bankruptcy
You must first make sure you’re eligible for Chapter 7 bankruptcy. If you make too much, you may be forced to file Chapter 13 bankruptcy under new federal laws. Depending on your income, assets, and debt burden, you may have to file Atlanta Chapter 13 bankruptcy. Also, if you filed bankruptcy 6-8 years ago, depending on what type of bankruptcy, you may not be eligible to file any bankruptcy.
Once you research limits, you also should research hiring an Atlanta bankruptcy attorney; you can find many online.

Filing Atlanta Chapter 7 Bankruptcy
You will need to file a petition with the bankruptcy court in your area when filing bankruptcy. After, you need to show schedules of assets and liabilities, info on current income and expenses, a statement of financial affairs, and a schedule of executory contracts and unexpired leases. You also need to supply your prior year tax return.

There other documents you must file if you’re an individual debtor filing Chapter 7 bankruptcy. Don’t worry–an Atlanta bankruptcy attorney can help you handle credit counseling debt repayment plan, evidence of payment from employers, a statement of monthly net income and potential changes in income and expenses after filing bankruptcy, and show a record of state or federal education accounts.

Sound hard?

Hiring an Atlanta Bankruptcy Attorney
An Atlanta bankruptcy attorney will help you with everything–if you choose the right one. Hiring lawyers can be difficult, but in most cases, you actually save money, assets, and time by hiring a professional bankruptcy attorney. He or she can advise you on bankruptcy law, walk you through all the steps of filing, and handle the court date.

If you need an Atlanta bankruptcy lawyer, you can find dozens online. Be sure to query experience, rates, and how busy they are. You want an attorney experienced in Atlanta law,  who fits your budget, and won’t put you on a huge list of clients for a small law firm.

Chapter 7 bankruptcy may be different than you think. With changes in bankruptcy law in the past years, Chapter 7 bankruptcy is now tougher to file. This is because some are forced to file Chapter 13 bankruptcy if they have enough income. It depends, then, on how much you make and  your monthly expenses. If you are out of work, and have little money coming in, you should be eligible for Georgia Chapter 7 bankruptcy.

Chapter 7 bankruptcy discharges you from the majority of your debts. There is a long  list of debts you cannot discharge, mainly tax debts, child support or alimony, debts for student loans,  and some others.

Chapter 7 bankruptcy is a liquidation proceeding. For Atlanta residents and all U.S. citizens, the court appoints a trustee to liquidate your nonexempt assets. In some cases, there are no assets which are nonexempt, meaning you lose nothing. This varies, but most Chapter 7 bankruptcy filings in  Georgia are no asset cases. The creditors will have no need to file a claim with the court in that case.

Once the bankruptcy begins, typically a 3-6 month process before your debts are discharged, an “estate” is created which in legal terms is the owner of all the debtors property.  Generally, creditors will be paid off by the nonexempt property of the estate.

The trustee has a key role here, in that he or she tries to get the most out of all the assets. The higher the sale, the higher amount which can be turned over to unsecured creditors. That means the trustee will be looking to sell your nonexempt properties for the highest value, as part of the Chapter 7 bankruptcy case.

But the debtor is actually trying to get money from nonexempt property in most cases. The trustee will follow Bankruptcy Code by the six classes of claims used in paying back debtors. As each of these classes are paid, the next level is paid.

What This Means
Filing a Chapter 7 bankruptcy involves far more than this complex set of rules. In short, even though in many cases little property is lost, the more value of your nonexempt property,the more the debtors have to pay back. Chapter 13 bankruptcy, now more encouraged than ever, is preferable if you want to maintain your home or other property. The only problem is, Chapter 7 bankruptcy discharges debt, while Chapter 13 bankruptcy does not.

Hiring a Georgia Bankruptcy Attorney
This makes it clearly more important to hire counsel, a Georgia bankruptcy attorney who can help you navigate the Bankruptcy Code.

Once a Chapter 7 bankruptcy is completed, all possible debts are eliminated for the debtor.  In Atlanta, you may only file a Chapter 7 bankruptcy if your household income falls below certain levels.  This limit is equal to the average household income for the state and does account for the size of your family. 

The median income tables are adjusted every six months and are available on the website for the bankruptcy trustee in your area. 

If your income exceeds this value for your family size, you may still be able to qualify for a Chapter 7 bankruptcy filing in Georgia, but you will have to satisfy a secondary qualification, known as a means test. 

The means test is designed to eliminate Chapter 7 bankruptcy as an option for those who have the ability to repay their debts through a Chapter 13 repayment plan. 

Essentially, this test ensures that Chapter 7 bankruptcy is utilized in only the situations where it is necessary and not as a blanket “get out of jail free” card for those who have made poor financial decisions. An Atlanta bankruptcy lawyer can assist you in determining if you qualify for a Chapter 7 filing. 

For the means test, a list of the debtor’s expenses is compiled.  The IRS has assigned a value for each of these expenses.  These allowable expenses are then compared to your gross household income.  If the amount left over is less than $100 each month, you may qualify to file a Chapter 7 bankruptcy in Atlanta even though your income exceeds the average household income for the state.

Understanding the rules of the bankruptcy process can be complicated and confusing. It is best to speak to an Atlanta bankruptcy attorney if you are considering bankruptcy.

Your household income is used to determine if you qualify for Chapter 7 bankrupcty or if you would have more disposable income available to payoff a portion of your debt.

First compare your income to the median income for your area. Below is the median income for Georgia as determined by the U.S. Census Bureau as of October 2008.

1. One person –  $39,253 
2. Two persons – $52,055
3. Three persons – $59,668
4. Four Persons - $68,908

If your household income is less than the median income, you will automatically qualify for Chapter 7 bankruptcy in Atlanta. If it is higher, there are quantifiers that could still qualify you for Chapter 7 protections. Speak to an Atlanta bankrutpcy lawyer to find out if you qualify for Chapter 7 bankruptcy.