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Chapter 7 Bankruptcy

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Chapter 7 bankruptcy can be better for individuals who need a completely fresh start. Chapter 7 bankruptcy is known as a "liquidation" bankruptcy, it wipes away all debt that is legally capable of expungement.

Do you qualify for Chapter 7 Bankruptcy?


To qualify, in a Chapter 7 Bankruptcy, a filer's income must be equal to or fall below the median income in Georgia. If the filer's income is above the state's median, the bankruptcy court will require the filer to take a "means test" in order to establish eligibility for Chapter 7. The means test assesses the filer's debt and income from the preceding six months. If the debtor has a certain amount of income leftover every month after paying creditors, the debtor will fail the means test. Although the debtor is ineligible for Chapter 7, Chapter 13 is an option. A Chapter 13 bankruptcy allows the debtor to repay creditors in a five-year repayment plan.

You could be ineligible under the following circumstances:

  • A previous debt was discharged within the past eight years under Chapter 7;
  • A previous debt was discharged within the past six years under Chapter 13;
  • Their income, expenses and debt would allow for a Chapter 13 filing;
  • The debtor attempted to defraud creditors or the bankruptcy court; or
  • The debtor failed to attend credit counseling.

Our purpose is to insure your bankruptcy rights are protected.
We do this by carefully answering your questions and walking you through each step of the bankruptcy process.

Step 1 - Initial Consultation

During this initial meeting, your lawyer will carefully go over the specifics of your situation in terms of finances and what goals you have. Your bankruptcy attorney will also talk with you about other forms of debt relief, and help you decide if filing for bankruptcy is the right option for you. All fees and payment plans are discussed during this time.

Step 2 - Prepare and File Your Petition for Bankruptcy

Typing up and going through the necessary steps involved in filing your bankruptcy petition takes a great deal of effort and time, and will be a large majority of the work that your attorney will do for you. After everything is in order and you have had a chance to review your petition, it is filed with the bankruptcy court. When your petition has been filed, you will be under the automatic stay protection, essentially meaning all collection activity must cease by your creditors.

Step 3 - Dealing with Your Creditors

When you have successfully retained your attorney, that office will be the ones who accepts collection calls on your behalf. Having a lawyer in your corner is usually enough to get most of your creditors to stop calling you.

Step 4 - Meeting of the Creditors

Typically, 30 to 45 days after your petition for bankruptcy has been filed, you will attend a 341 Meeting of the Creditors. We will help you prepare for this meeting and discuss with you any issues or questions that you may have prior to your 341 meeting. Depending on which type of bankruptcy that you file for, your Cumming Georgia bankruptcy attorney will have additional duties that he or she will perform for your benefit.

The Main Events of Chapter 7 Bankruptcy

  1. Attend credit counseling prior to filing for Chapter 7.  Following credit-counseling, the debtor can file for Chapter 7 bankruptcy with a local bankruptcy court.  A debtor must provide income, debt, expenditures, creditor holdings of secured and unsecured debt, the sale of prior property, and a list of exempt property.  Exempt property is property that Chapter 7 bankruptcy rules allow a debtor typically includes clothing, furniture, and cars.

  2. The Automatic Stay.  Once a debtor files for bankruptcy, the bankruptcy court will issue an automatic stay, or an "Order for Relief."  The automatic stay essentially stops all activity from a creditor as soon as a case for bankruptcy is filed with a court.  This goes a long way in preventing the harassing calls and notices that creditors hit debtors with.  All collection activities, including any pending lawsuits, must cease, no wage garnishment, no liens, seizure of a debtor's property such as a house, a car, or a bank account is stopped.  There is no requirement to have a judge sign off on the action.  Any creditors that try to get around the automatic stay will face severe consequences.  The automatic stay remains in place until an individual’s bankruptcy case is concluded, discharged or dismissed.
    Note:  The automatic stay is not a permanent action.  In some cases, the creditor can file a petition that grants them relief from the automatic stay mandate, usually because the collateral that they have is losing its value and the potential for them to suffer loss is great.

  3. The Role of the Trustee.  The bankruptcy court in Georgia appoints a trustee for each bankruptcy case. The trustee is responsible for overseeing the case to ensure that the debtor files the appropriate documents. The trustee must also determine whether the sale of nonexempt property will produce enough income to be of any value to repay creditors, and justify the effort needed to sell the property.  If it does add up, the trustee will likely allow the debtor to keep the nonexempt property.

  4. The Creditors Meeting.  After Chapter 7 bankruptcy is filed, the trustee will schedule a creditors meeting where trustee will review the paperwork and gather any other necessary information.  If a debtor does not attend the creditors meeting, the trustee may make a motion to dismiss the debtor's case.  If a  debtor fails to provide a copy of income tax returns at least seven days before the creditors meeting or the failure to file a current income tax return, the debtor’s case could be dismissed.  In most cases, this creditors meeting is the only time the debtor will have to go to the courthouse.

  5. The Nonexempt Property.  If the trustee determines that you are in possession of nonexempt property, you may have to either surrender the property or supply the trustee with equal money in the amount of the property's value. Yet, if the property doesn't have real value or would be too difficult for the trustee to sell, trustees might "abandon" the property, essentially allowing you to keep even if it is nonexempt.

  6. The Discharge of Debt.  After the creditors meeting, the bankruptcy court will hold a discharge hearing.  A debtor's unsecured debt, debt that is not secured by property, is discharged.  Secured debt, such as a car loan or a mortgage, is different.  At the beginning of the bankruptcy process, the debtor decided to do either pay the creditor for the replacement value of the property, return the property to the creditor, or "reaffirm" or agree to new contract terms with the creditor.

  7. The Tail of the Tape.  In a Chapter 7 bankruptcy, the debtor must still repay some debt, including child support, tax debt, unless a debtor meets the criteria to discharge federal tax debt, student loans, unless a bankruptcy court determines that undue hardship exists, and debt created by fraudulent means.

  8. The Last Word.  Once a discharge of debt occurs, the creditor can no longer attempt to collect the expunged debt.

At the McCormick Firm PC, we pride ourselves on helping each and every one of our clients with the best possible practices and tactics. Our goal is to help rid them of their debt burden so they breathe easier, sleep better, and can move on with their lives. If you or someone you know, or love is thinking about filing for bankruptcy, contact the McCormick Firm PC today for a free consultation. You can begin living, debt-free, once again.

Our purpose is to insure your bankruptcy rights are protected.

We do this by carefully answering your questions and walking you through each step of the bankruptcy process beginning with:

Stop Harassing Phone Calls and Lawsuits Immediately
with the help of a Chapter 7 Cumming Georgia Bankruptcy Lawyer

Depending on how much income you earn as well as the expenses that you have, filing for Chapter 7 bankruptcy may be the right option for you. Chapter 7 bankruptcy favor men and women who are currently making less than the median household income in the state of Georgia, and are often considered as a way to achieve a fresh start during a difficult time in one’s life.

After you file your creditors must halt all phone calls, repossessions, foreclosure activities and wage garnishments so that you can begin to live your life after bankruptcy. You will be able to keep the personal items inside of your house, and may have the opportunity to keep your car and home.

At The McCormick Firm, we work hard to help every one of our clients make sure that they complete all of the requirements that come along with filing for Chapter 7 bankruptcy, from attending meetings for credit counseling to taking a course in financial management. We take the necessary time to carefully explain the advantages and disadvantages associated with Chapter 7 bankruptcy. You will have the peace of mind knowing that we are on your side.

We pride ourselves on tackling the complexities associated with calculating your debt and moving forward with your debt relief plan in a timely manner, so you can start your rebuilding process, debt free.

So you can breathe!
Free consultation with one of our Cumming Georgia Bankruptcy Attorneys

Call the McCormick Firm PC today for a free consultation to see if filing for Chapter 7 bankruptcy can help you become a debt-free member of society.

Passionate, Accessible, and Responsive
We are a bilingual firm passionate about helping our clients, and look forward to helping you put your debt problems behind you, whether they stem from a failed business, personal loan situation or from credit card debt.
The McCormick Firm P.C.

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