General Questions

• How do I file bankruptcy? How do I start a bankruptcy? The simplest thing to do is to call our office and schedule an appointment.  Typically, most people meet with an attorney to discuss their financial situation.  With the attorney’s assistance, all the necessary documentation is prepared, reviewed, and filed electronically with the bankruptcy court.  The initial documents needed are a petition, schedules, various statements, credit counseling certificate, and paystubs.
• What are exemptions? Can I keep my assets if I file bankruptcy?  Exemptions are dollar values in different types of assets that you can keep during a bankruptcy.  In Georgia, exemptions usually cover most normal people’s belongings.  If someone has a very valuable item, there could be a risk of losing it.  Usually our clients are most concerned about cars and houses.
• Can I keep my car if I file bankruptcy? In most cases, YES, you can keep your car if you file bankruptcy.  If the car is paid for (no car loan) and the car is not too expensive, you usually have sufficient exemptions to keep it.  If the car has a loan against it and you are current, you can typically “reaffirm” the debt in a chapter 7 or repay the debt through a chapter 13.  If you are behind on your car loan, your only option may be a chapter 13 where you can force the lender to let you keep the car and make payments.
• Can I keep my home if I file bankruptcy? In most cases, YES, you can also keep your home.  If your home is paid for, you may have to pay out a pool of funds to creditors over a 3 to 5 year chapter 13 plan, which represents your home equity in excess of your exemptions.  Any debt left unpaid in the chapter 13 is discharged.  If you have a mortgage, you can usually reaffirm the debt in a chapter 7 if it is current or catch up the mortgage through a chapter 13 if you are behind.
• Can I keep my 401k, IRA, or retirement plan if I file bankruptcy? In almost all cases, YES.  Most retirement plans are ERISA qualified or fall into other categories that are fully exemptable from the bankruptcy case.
• Who is the bankruptcy trustee? The trustee is not a judge, but is usually an attorney, that is appointed to oversee your case.  Different bankruptcies use different trustees.  Chapter 7 trustees will look for any non-exempt assets to give to creditors.  Chapter 13 trustees handle chapter 13 plan payments and make distributions to creditors.
• Does bankruptcy eliminate all of my debt? Most debts are dischargeable, which means they are permanently banned from collection at the end of your case, and therefore constructively eliminated.  Some debts cannot be eliminated absent special circustances with the most common being: student loans, taxes, child support, and criminal fines.  Other debts require the creditor to bring a special lawsuit to explain why the debt should not be eliminated, such as one procured through fraud.  Lastly, people commonly reaffirm or keep debts that are important to them, such as car loans and mortgages, and therefore these debts would also not be eliminated.
• Does bankruptcy hurt my credit? This is a difficult question because so many factors go into a credit score and even more factors go into a lender’s decision to make a loan.  The bankruptcy itself is a negative notation on your credit.  However, much of what a bankruptcy accomplishes can improve your credit or make you more appealing to lenders.
• How much does bankruptcy cost? Bankruptcy cases can vary widely in cost depending how what type of case and how complicated your case is.  The filing fees are set by the bankruptcy court and you will have to meet with an attorney to determine what fee they will charge.
• Do people know if I file bankruptcy? Technically, bankruptcy cases are public record, so you cannot prevent someone from finding out.  However, thousands of bankruptcy cases are filed every month in Georgia and few people have ready access to this information.  Therefore, usually no one is aware.
• Can I be fired for filing bankruptcy? It is illegal under federal bankruptcy law to discriminate against employees who voluntarily file bankruptcy.
• Can bankruptcy stop a foreclosure? Yes, the filing of a bankruptcy stops a foreclosure and any other collection activity, but it can not undo a foreclosure that has already been completed.  If you are facing foreclosure, it is imperative that you speak to an attorney well in advance of the foreclosure date.
• Can bankruptcy stop a garnishment? Yes, the filing of a bankruptcy stops a garnishment.  Sometimes, the garnishment court will even return some of the funds.

Chapter 7

• Can I file Chapter 7 bankruptcy? To qualify for chapter 7, you must pass the means test.  Passing the means test requires your income to either be below a certain level or after taking into account all your deductions, you do not have sufficient income to repay debt.  Also, you can be barred from the benefits of chapter 7 if you are engaged in fraud or other bad faith, such as hiding assets, prior to filing chapter 7.
• What happens in Chapter 7? Chapter 7 cases typically last 3-4 months.  You meet with your attorney to prepare your paperwork, complete creditor counseling, and file your case.  You will be given about 1 month prior notice of a meeting with the trustee, which typically only lasts 5 minutes.  There is another financial management to complete.  Then, 2 months later you receive your discharge and your case is closed.
• Please see our page on Chapter 7 Bankruptcy for more information!

Chapter 13

• Can I file Chapter 13 bankruptcy? Most everyday people can file chapter 13.  If your debt exceeds certain limits, you may be precluded from filing.  If your income is too high for chapter 7, then chapter 13 may be your only option.
• What happens in Chapter 13? Prior to filing, you meet with your attorney to prepare your paperwork and complete credit counseling.  Unlike chapter 7, you prepare a repayment plan.  Usually the repayment plan lasts 3 to 5 years and only repays important debts, like car loans, missed mortgage payments, taxes, and your attorney fees.  At the end of the 3-5 year plan period, you receive a discharge of your other debt, such as credit cards and medical bills, and your case is closed.
• Please see our page on Chapter 13 Bankruptcy for more information!