Struggling to pay debts can take a toll on your emotional wellbeing and your health. Stress from debt problems can cause insomnia, high blood pressure, and other health issues. Instead of dodging debt collectors and worrying about how to pay bills, you cannot afford, you might want to consider filing Chapter 7 bankruptcy in Georgia. You should check out our Chapter 13 Bankruptcy Georgia if you are interested in looking at Chapter 13.
If you have questions about Chapter 7 bankruptcy in Georgia, click on any question or topic in the Table of Contents to take you directly to the answer in this article. You can also read straight through the article. We organized the information to give you a brief overlook at the Chapter 7 process in Georgia.
1) Understanding Chapter 7 Bankruptcy in Georgia
Filing Chapter 7 bankruptcy in Georgia can help you get rid of the debts you cannot pay. You could be debt-free in as little as six months if your Chapter 7 case is a no-asset case. However, first you need to decide if Chapter 7 bankruptcy is right for you.
Chapter 7 vs. Chapter 13 Bankruptcy
Individuals generally file under Chapter 7 or Chapter 13 of the Bankruptcy Code. Chapter 7 bankruptcy in Georgia is a liquidation bankruptcy. It is intended for individuals who do not have the income or resources to repay their debts.
Key Chapter 7 FAQs that you should know include:
- Must meet income qualifications for a bankruptcy discharge
- Can get rid of most unsecured debts
- Most cases take about six months to complete
- Chapter 7 trustee could liquidate an asset that is not protected by bankruptcy exemptions
- Shows up on your credit report for ten years
Key Chapter 13 FAQs that you should know include:
- Takes three to five years to complete a Chapter 13 bankruptcy plan
- Costs more to file than Chapter 7 bankruptcy in Georgia
- Appears on your credit record for seven years
- Can protect assets from being liquidated
- Most people with a steady income can qualify for Chapter 13
For most individuals who cannot afford to pay their debts, Chapter 7 is preferable to Chapter 13. However, there are other issues to consider before deciding to file Chapter 7 bankruptcy in Georgia.
2) Estimating Chapter 7 Income Qualifications for Georgia
The first step in filing Chapter 7 bankruptcy in Georgia is determining whether you meet the income requirements. The income requirements are based on your annual median income.
Your median income is compared to the median income to the annual income in Georgia for a household of your size. If your median income is lower, you have a good chance of qualifying for Chapter 7 bankruptcy in Georgia.
Do I Qualify For Chapter 7 Bankruptcy in Georgia?
The Chapter 7 Means Test is used to calculate your annual median income. It is a standard bankruptcy form used by all debtors who file under Chapter 7. The first section of the Means Test calculates the following two figures used to determine whether you meet the income qualifications for Chapter 7:
- Current Monthly Income — Total of all household income for the past six months divided by six. (Try our average income calculator)
- Annual Monthly Income — Multiply your current monthly income by 12.
Our Georgia Chapter 7 Calculator below will help you estimate whether you might qualify for Chapter 7 bankruptcy in Georgia. The calculator gives you an estimate of whether you might qualify for Chapter 7 and what you can do if your median income exceeds the Georgia median income.
My Chapter 7 Income Was Over Georgia’s Median Income. Does That Mean I Don’t Qualify?
If your median income exceeds the state median income, you could still qualify for Chapter 7 if your disposable income is below a certain level.
Disposable income is calculated in the second part of the Means Test. You subtract your allowed monthly expenses from your current monthly income to see how much money you have each month to pay toward your debts. If your disposable income is a negative amount or very low, you might qualify for a bankruptcy discharge under Chapter 7.
If your income exceeds the Georgia median income, we have a calculator that helps you calculate your disposable income. Send us a message to learn more and try the calculator.
What Does Chapter 7 Bankruptcy in Georgia Cost? Can I Afford It?
Chapter 7 is less costly to file than Chapter 13. In a Chapter 7 case, you must pay a filing fee to the bankruptcy court of $335. You must also pay for your mandatory bankruptcy courses. Several agencies in Georgia offer the bankruptcy courses. Shop around to find the lowest fees, which could be as low as $15 to $50.
Some individuals can waive the Chapter 7 filing fee and the fees for the bankruptcy courses. Talk to the bankruptcy court and the agency providing the bankruptcy course about the requirements for waiving the fees.
The highest cost of filing Chapter 7 bankruptcy in Georgia is the attorneys’ fees. Use our Georgia Bankruptcy Lawyer Fee Calculator to estimate what it would cost to file Chapter 7 in Georgia.
Contact us to discuss the attorneys we partner with in Georgia who offer free bankruptcy consultations and payment plans to make it affordable to file Chapter 7 bankruptcy in Georgia.
Georgia Bankruptcy Legal Aid
If you cannot afford a Chapter 7 bankruptcy lawyer, you might qualify for legal aid. Legal aid is generally available to individuals who earn less than the poverty level in their area.
You might want to contact one or more of the following entities for more information about legal aid:
If you do not qualify for legal aid, reach out to us. You might be surprised how affordable it can be to file Chapter 7 bankruptcy in Georgia.
3) Should I File Chapter 7 Bankruptcy in Georgia?
If you have debts you cannot pay and meet the income qualifications for Chapter 7, filing bankruptcy might be the best way to get out of debt. However, there are a few things to consider before plunging forward into a Chapter 7 bankruptcy.
Georgia Chapter 7 Bankruptcy Exemptions
The Bankruptcy Code allows debtors to protect specific property from being used to repay unsecured debts. Federal bankruptcy exemptions list the property and the amount of net equity protected in a bankruptcy case.
However, Georgia opted out of the federal bankruptcy exemptions. If you are a resident of Georgia for at least 730 days before filing Chapter 7, you must use the Georgia bankruptcy exemptions.
Georgia bankruptcy exemptions protect a variety of property, including your home, vehicle, and household goods. The amount of net equity varies and changes every few years to reflect inflation.
A few of the common Georgia bankruptcy exemptions include:
- Georgia homestead exemption – $21,500 (up to $43,000 if married and only one spouse owns the property)
- Motor vehicle exemption – $5,000
- Household goods exemption – $5,000 ($300 limit per individual item)
There are many other exemptions you can use in a Chapter 7 bankruptcy in Georgia. If any of your property has a high net worth (market value less any liens), you should talk to a Chapter 7 bankruptcy lawyer before filing bankruptcy.
A Chapter 7 bankruptcy trustee can sell property with non-exempt equity to pay your unsecured debts. For more information about how bankruptcy exemptions work, read our articles about keeping your house or keeping your vehicle in bankruptcy.
How Does Chapter 7 Bankruptcy Affect Your Credit?
A Chapter 7 bankruptcy case stays on your credit report for ten years. However, that does not mean you cannot obtain credit, buy a house, or buy a vehicle for ten years. In most cases, Chapter 7 debts see an increase in their credit score within a year of filing Chapter 7.
Pros and Cons of Chapter 7 Bankruptcy
There are many pros and cons of filing Chapter 7 bankruptcy in Georgia. Key advantages and disadvantages to consider include:
- PRO – Get rid of debts in six months or less
- CON – Temporary decrease in credit scores
- CON – More difficult to obtain credit for a few years
- PRO – Do not need to repay any portion of discharged debts
- CON – Could lose property not protected by bankruptcy exemptions
- PRO – Most people keep all their property when they file Chapter 7 in Georgia
- PRO – Less costly to file compared to Chapter 7
If you want to talk with a Chapter 7 lawyer in your area about whether filing Chapter 7, contact us. We can help locate an attorney who offers free bankruptcy consultations.
Chapter 7 Bankruptcy Alternatives
There are alternatives to filing Chapter 7 bankruptcy in Georgia that you might want to explore. Ascend has information about alternatives to Chapter 7, such as:
Deciding whether to file Chapter 7 or using another debt relief option can be a challenging decision. If you are still unsure what to do, contact us. We can give you more information about bankruptcy and debt relief to help you decide which form of debt relief is best for your financial situation.
4) What Else Is Important About the Georgia Chapter 7 Bankruptcy Process?
Are you ready to get out of debt? Track your progress with our debt freedom portal. Learn more about Chapter 7, track your steps, and get the help you need to become debt-free.
Filing Bankruptcy in Georgia Process
The Chapter 7 bankruptcy process in Georgia is straightforward. If you do not have any assets that are not exempt or other issues that could complicate your case, the steps in a no-asset Chapter 7 case include:
- Deciding to file a Chapter 7 bankruptcy case
- Confirming you meet the Chapter 7 income qualifications
- Deciding whether to hire a Georgia Chapter 7 bankruptcy lawyer
- Complete your credit counseling course
- Complete and file the Chapter 7 petition, schedules, and statements
- Chapter 7 trustee is assigned to your case
- Complete your debtor education course
- Attend the 341 First Meeting of Creditors (bankruptcy hearing)
- Receive your bankruptcy discharge
Some cases could have additional steps depending on your unique financial situation.
Georgia Bankruptcy Districts
Georgia is a large state. Therefore, it is divided into four bankruptcy districts. Each district serves specific counties:
- The Southern Bankruptcy District of Georgia has six divisions. The six divisions are Brunswick, Augusta, Dublin, Statesboro, Waycross, and Savannah.
- The Middle Bankruptcy District of Georgia is in Macon. Seventy (70) Georgia counties are included in the Middle District. A staffed bankruptcy court is also located in Columbus.
- The Northern Bankruptcy District of Georgia has four divisions located in Atlanta, Rome, Newman, and Gainesville. Each division serves counties in the surrounding areas.
The county of your residence determines which district handles your bankruptcy case.
What Georgia Chapter 7 Bankruptcy Questions Can We Answer?
We understand that debt problems can be overwhelming. Most people who file Chapter 7 bankruptcy in Georgia do so because of a financial crisis that was not within their control. They lost their job, became ill, had an accident, or lost a spouse.
The bankruptcy process helps individuals who cannot pay their debts. It gives them a fresh start to recover after a financial hardship.
If you have questions about debt relief, reach out to us. Our goal is to help you find the most affordable, effective way to eliminate debt. We want to help you improve your finances for a healthier financial future.