Chapter 7 Bankruptcy Information for Georgia

Means Testing

• To qualify for Chapter 7, individuals or married couples must go through "means testing" in order to qualify for liquidation. The test compares the median income of the household with the median income for similar family size in Georgia. As of April 2010, the median income starts at $40,546 for singles and $68,258 for a family of four. Add $7,500 for each additional person in the household. Subtract household expenses, from income at, or above the median, to determine eligibility. Use the table for the county and metropolitan area for where you reside to determine what to subtract.
  
  

Function

• Complete a credit counseling session within 180 days of filing for Chapter 7. Go to the U.S. Bankruptcy Court for where you reside: Macon, Atlanta, Newnan, Columbus, Rome, Savannah and Augusta. File a petition and other financial documents, including numerous schedules outlining assets and debts, list of creditors, the type of claims, the claim amounts income and expense and property ownership. You must also file a Statement of Financial Affairs. You must pay a fee of $299 as of May 2010, which you can make in installments if you do not have all the money.
  
  The court issues an "automatic stay" that precludes creditors from attempting further activities to collect on the debts, including calling, letters, repossession, foreclosure or wage attachment. The bankruptcy trustee takes over the assets of the debtor and schedules a "341 meeting." The debtor appears before the trustee to answer questions. Creditors may attend the meeting. The trustee must sell any excess property above the allowable exemptions and distribute the proceeds among the creditors.
  
  

Exemptions

• Georgia allows debtors to exclude $5,000 of personal and/or real property from the trustee sale. Creditors cannot claim Social Security payments, unemployment, public assistance, disability payments or alimony. Debtors may keep certain items that do not exceed the $5,000 aggregate value or the caps for the category, such as books or tools of the trade ($500), automobiles ($1,000) or household furnishings, books, clothing and other items ($200).
  
  

Time Frames

• The 341 meeting takes place within 30 to 45 days after filing the petition. The debtor must complete a financial management course within 45 day after the trustee meeting. Chapter 7 bankruptcy discharges occur 60 to 90 days after the meeting. Chapter 7 bankruptcy remains on the debtor's credit record for 10 years, and he cannot file for bankruptcy for six years.
  
  

Discharge

• The court usually grants most Chapter 7 discharges. Denial occurs because of fraud, failing to work with the court or not following court orders. The discharge affects certain unsecure debts only. Secure obligations, alimony, child support, educational loans, some taxes and other debts remain intact. Creditors may not attempt to collect on discharged obligations.