Frequently Asked Questions: Chapter 7 Bankruptcy

There are many myths and questions that persons considering bankruptcy have about the process. Nowhere is this more true than with Chapter 7 bankruptcy.

Pratt & Wall, Attorneys at Law, have drafted some answers to the most common questions asked about Chapter 7 bankruptcy at our law office.

What Is Chapter 7 Bankruptcy?

If filing for bankruptcy is an opportunity for a debtor to emerge out of a financial crisis and start fresh, then Chapter 7 of the Bankruptcy Code is one of the fastest ways to achieve this result. Under Chapter 7 of the Bankruptcy Code, nonexempt property of the debtor may be sold, with the proceeds distributed to creditors. In most cases, there are no nonexempt assets for the trustee to sell. With all of the federal exemptions, state exemptions and common law exemptions, almost all parties filing Chapter 7 bankruptcy retain 100 percent of their assets and eliminate 100 percent of their non-priority debts. Clients go from consultation to permanent debt elimination quickly.

Is Chapter 7 Bankruptcy The Best Solution?

Chapter 7 is often called straight bankruptcy and is the most common form of bankruptcy filing. Generally, Chapter 7 bankruptcy eliminates all non-priority debts and allows you to get on with your life without the shadow of insurmountable debt and ridiculous interest rates over your head causing you stress and anxiety. If you have a large second mortgage and your home is worth less than your first mortgage or if you are behind on your first mortgage, you may consider Chapter 13 to help you keep your house and possibly eliminate your second mortgage.

How Does Bankruptcy Work Under Chapter 7?

A trustee is appointed who collects all nonexempt property, sells the assets and distributes proceeds from this sale to appropriate creditors. Chapter 7 is different from other bankruptcy filings because the debtor does not make payments to the trustee.

Generally, people filing Chapter 7 bankruptcy in Georgia get to keep all of their assets. Under Georgia law, a debtor has significant exemptions. Exemptions are assets and values the trustee is not allowed to take and sell. The exemption amounts are usually sufficient to cover any assets you might own. If you are worried that bankruptcy would cause you to lose your assets, discuss the matter with your bankruptcy attorney.

Who Can File For Chapter 7 Bankruptcy?

If you have not filed bankruptcy in the past eight years, you have a Social Security number, your income is not over the median for your jurisdiction and you have lived in the jurisdiction for six months, you can eliminate your debts through Chapter 7.

How Do I Start The Chapter 7 Process?

If you are ready to discuss your situation and hear your options, call our office at 770-614-4811 or complete our online contact form to make an appointment to meet with an experienced attorney. The consultation is free!

Under federal law, we are designated as a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code.