Chapter 7 is often called the "fresh start" bankruptcy, since it eliminates the vast majority of your debts. This type of bankruptcy is most beneficial for people without much income or valuable property, who cannot afford to repay their current debts. Filing Chapter 7 should immediately stop all forms of collection actions. Chapter 7 can remain on your credit reports for up to 10 years. The entire process takes about five to six months. However, your case could take longer if the trustees seek additional documents or if they decide to sell some of your property. Chapter 7 is not for everyone, but it could be your only option to legally eliminate certain financial obligations and reset your finances.
Chapter 7 will assist people burdened by unsecured debts by eliminating them. Unsecured debts include the following: credit cards, collection accounts, medical bills, past due rent, past due utilities, payday loans, some tax debt, and vehicle deficiencies. A few debts cannot be discharged by Chapter 7, such as child support, alimony, certain tax debts, student loans, homeowners' association fees, court fees and penalties, and criminal restitution judgments. Occasionally, a creditor may object to a certain debt getting discharged, but they need a legitimate reason. For example, a creditor may object to a payday loan or cash advance that was given within 90 days of filing a bankruptcy.
Also, secured debts such as your home mortgage or vehicle loan may be discharged in Chapter 7. A reaffirmation agreement must be signed by all parties and filed with the court; this process is fairly easy. If the secured debt is discharged and you are delinquent, the creditor may still have the right to foreclose or repossess your property.
Below are the year-to-date figures for bankruptcies filed in the Northern District of Georgia for the last four years.
Year-to-date: 2019
Year-to-date: 2020
Year-to-date: 2021
Year-to-date: 2022
No prior bankruptcy discharges in the last 6-8 years (depending on the type of bankruptcy previously filed)
Must pass the means test, which compares your income with the median income in your state and determines your ability to repay debts.
Must not have a prior 109(g) dismissals, within the last 180 days, preventing you from filing.
Usually, Chapter 7 liquidation occurs under two conditions: 1) when property of the individual filing has unexempt equity; and 2) when an individual fails to disclose property and, consequently, does not exempt equity in the property.
Each state has its own set of guidelines for how much equity is protected in a bankruptcy; the set of guidelines is called an exemption. Unexempt equity is the amount above the equity protected by the aforementioned exemption. Property with unexempt equity may be sold in a Chapter 7. If you are unsure whether your property has equity, you may check it using the calculator below. However, since every state differs, you should contact an experienced an attorney to determine your state specific exemption.
The Chapter 7 trustee is only paid a nominal administrative fee ($78.00) to review and supervise each Chapter 7. If the filing fee is waived, the trustee gets nothing. Therefore, the trustee must review and supervise a large number of cases every month to earn a living; this requires them to be skilled and efficient. More importantly, the trustee is entitled to a hefty commission on the sale of property, and therefore, it is in their best interest to ensure all property is listed and does not have equity.
In order to determine if you are a liquidation risk, you should speak to an experienced attorney.
$365.00 – Includes your filing fee and credit counseling course. These costs must be paid prior to filling.
$0.00 down and easy payments of $150.00 - $200.00 per month. Payments on our fee does not start until after you file. A promissory note is required if fees are not paid in full. Although fees may vary, you will never pay more than $1, 200.00.
All collection activities stop immediately.
Credit Improves after your discharge, because you have less debts.
You will be able to restart building your credit in five -six months.
Most debtors do not lose any assets.
Chapter 7 can only be filed once every 8 years.
You take an initial credit hit, when you file.
Co-signers are still liable for co-signed debts.
A small number of debtors lose non-exempt assets to the Chapter 7 trustee.
Ask about whether you qualify for our pro bono services for select senior citizens.
