The federal bankruptcy code details the guidelines for filing bankruptcy. Consumer bankruptcies are typically included under Chapter 7 or Chapter 13, depending on the type and amount of debt you owe. In a Chapter 7 bankruptcy, your liability for certain types of debt is erased. In return, you agree to surrender some or all of your assets to the court.
The court then liquidates these assets and uses the proceeds to repay some of what is owed to your creditors. In addition to federal guidelines, residents of Georgia must also adhere to the local rules established by the Northern and Southern district bankruptcy courts.
Before you can file your Chapter 7 petition, you must determine whether you qualify to do so. In 2005, the federal government established the Bankruptcy Abuse Prevention and Consumer Protection Act, which introduced the means test as the standard for determining Chapter 7 eligibility. Under the means test, your median income for the previous six months must be less than the median income for your family size in your state. Median income levels are established by the U.S. Census Bureau. The U.S. Department of Justice maintains a list of median income levels by state.
Credit Counseling/Financial Education
In addition to the means test, you're also required to complete credit counseling before filing your Chapter 7 petition. You must obtain credit counseling with a court-approved agency six months prior to filing. Within 45 days of filing, you must also complete a second course in financial management. If you fail to meet either of these requirements, your case may be automatically dismissed.
When You File
When you file your Chapter 7 petition, you must submit all the appropriate paperwork along with the filing fee. The filing fee for Chapter 7 was $299. In addition to your petition, you must submit your credit counseling certification, a detailed list of all your creditors and the debts you want to include in the bankruptcy, a list of your assets, your prior year's tax returns and a summary of your financial situation. If you can't pay the filing fee, you can petition the court to have these fees waived. You're not required to have an attorney to file bankruptcy in Georgia, unless you plan to use the electronic filing system.
You must also inform the court of what property you wish to claim as exempt. You can choose to use the federal or state exemption limits. In Georgia, you can exempt up to $10,000 worth of equity in your home or $20,000 if you're filing jointly with your spouse. You can exempt any motor vehicle up to $3,500 and tools of the trade up to $1,500. Additionally, you're allowed to exempt up to $5,000 in personal property and $500 worth of jewelry.
Meeting of Creditors
In order to receive a discharge of your Chapter 7 case, you're required to attend a 341 meeting, also known as the meeting of creditors. At this brief meeting, the bankruptcy trustee who is responsible for overseeing your case will ask you questions about your debts, assets, income and overall financial situation. Your creditors may attend this meeting, although they typically choose not to. If no disputes are raised at this meeting, your case will be referred for discharge. Once your case is discharged, you are no longer liable for any debts included in the bankruptcy.
While bankruptcy may seem like an extreme option, in some cases it can be the best and only way to resolve your financial difficulties. Before you file Chapter 7 in Georgia, it's important to understand how state guidelines may affect your ability to file to determine whether it's the right choice for you.