By Robert J. Semrad | Published October 09 2013 |
Chapter 7 Bankruptcy Explained
The process of filing for Chapter 7 bankruptcy in Georgia may seem complicated and can be difficult for anyone to understand. However, don't get discouraged. Chapter 7 can eliminate your debt and alleviate the stress associated with your financial burdens. We have provided below the answers to some frequently asked questions about Chapter 7. We hope this will help you understand how Chapter 7 works.
My income is above the median ― can I still qualify for Chapter 7?
The 'means test' consists of two parts. The first part compares your family income over six months prior to your bankruptcy filing to the statutory median income for the same size household in your area. If your income is above the median, then you may reduce your income by deducting certain expenses allowed by the IRS, including standard of living expenses, expenses for transportation and housing, payments on secured property, priority debts, etc. The current median income for a family of two in Georgia is $51,954. If, after you make these deductions, your income is still over the median, you'll have to consider filing under Chapter 13 instead.
How does the automatic stay protect me in Chapter 7?
The automatic stay is a powerful and immediate remedy that prohibits creditors from initiating or continuing debt collection activities against you. You are not required to request the automatic stay protection — it is, as the name implies, activated as soon as you file your bankruptcy petition. Until your case is dismissed or the court lifts the stay, your creditors may not foreclose or repossess your property, garnish your wages, or even demand payment by phone or mail. You can sue any of your creditors if they attempt to engage or engage in prohibited collection activities while the automatic stay is in place.
What do I need to file for Chapter 7 bankruptcy?
To file for Chapter 7 bankruptcy, you will need to file the proscribed bankruptcy forms — for your bankruptcy attorney to prepare these forms for you, they will need to see your financial records, including, but not limited to:
- Income tax transcripts from the current year
- Schedule of assets and liabilities
- Schedule of income and expenditures
- Statement of financial affairs
- Schedule of executory contracts (contracts you may have made with creditors, such as real estate and equipment leases)
- Proof of attendance at approved credit counseling program
The attorneys DebtStoppers, Bankruptcy Law Firm Robert J. Semrad & Assoc., LLC can help you take your first step towards debt free future.