FAQ

WHAT IS BANKRUPTCY?
Chapter 7 and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. One of the main purposes of bankruptcy legislation is to afford the opportunity to a person who is hopelessly burdened with debt to free himself or herself of the debt and have a fresh start.

WILL MY CREDITORS STOP HARASSING ME?
Yes, they will! By law, all actions against a debtor must cease once the documents are filed.  Creditors cannot initiate or continue any lawsuits or wage garnishment, or even make telephone calls demanding payments. However, secured creditors, such as banks holding a lien on a car, may try to get the stay lifted if you cannot make payments.

WILL MY SPO– USE BE AFFECTED?
Your spouse will not be affected by your bankruptcy if they are not responsible (they did not sign an agreement or contract) for any of your debt.

HOW DOES BANKRUPTCY HELP?
From an individual debtor’s standpoint, one of the primary goals of filing a bankruptcy case is to obtain relief from burdensome debt. Relief is attained through the bankruptcy discharge, the purpose of which is to provide a “fresh start” to the debtor.

WHAT IS CHAPTER 7?
Chapter 7, called liquidation, contemplates an orderly, court-supervised procedure by which a trustee collects the NONEXEMPT assets of the debtor’s estate, reduces them to cash, and makes distributions to creditors, subject to the debtor’s right to retain certain exempt property and the rights of secured creditors. Important: Because there is usually little or no nonexempt property in most Chapter 7 cases, usually there is no actual liquidation of the debtor’s assets. These cases are called “no-asset cases.” A creditor holding an unsecured claim will get a distribution from the bankruptcy estate only if the case is an asset case and the creditor files a proof of claim with the bankruptcy court. In most Chapter 7 cases, the debtor receives a discharge that releases the debtor from personal liability for certain dischargeable debts. The debtor normally receives a discharge just a few months after the petition is filed.

WHAT IS CHAPTER 13?
Chapter 13, called Adjustment of Debts of an Individual with Regular Income, is designed for an individual debtor who has a regular source of income. Chapter 13 may be preferable to Chapter 7 because it enables the debtor to keep a valuable asset, such as a house with substantial equity, while still receiving Bankruptcy protection. It is also favored because it allows the debtor to propose a “plan” to repay creditors over time – usually three to five years. At a confirmation hearing, the court either approves or disapproves the plan, depending on whether the plan meets the Bankruptcy Code’s requirements for confirmation. Chapter 13 is very different from Chapter 7, since the Chapter 13 debtor usually remains in possession of the property of the estate and makes payments to creditors, through the trustee, based on the debtor’s anticipated income over the life of the plan. Unlike Chapter 7, the debtor does not receive an immediate discharge of debts. The debtor must complete the payments required under the plan before the discharge is received. The debtor is protected from lawsuits, garnishments, and other creditor action while the plan is in effect. The discharge is also considerably broader (i.e., more debts are eliminated) under Chapter 13 than the discharge under Chapter 7.

CAN I KEEP ANY CREDIT CARDS?
No.  If you are discharging a credit card, the credit card company will cancel the card.  If you fail to list a card, know that most credit card companies have “bots” that go through the bankruptcy filings daily and will spot your Social Security number.  Those cards will be cancelled, too.

WILL I EVER BE ABLE TO GET CREDIT AGAIN?
Yes! The fact you filed bankruptcy becomes less significant the further in the past the bankruptcy is. The truth is, most banks will probably consider you a better credit risk after bankruptcy than before.

ARE ALL DEBTS DISCHARGED IN BANKRUPTCY?
Not all debts are discharged. The debts discharged vary under each Chapter of the Bankruptcy Code. Section 523(a) of the Code specifically excludes various categories of debts from the discharge granted to individual debtors. Therefore, the debtor must still repay those debts after bankruptcy. Congress has determined that these types of debts are not dischargeable for public policy reasons (based either on the nature of the debt or the fact that the debts were incurred due to improper behavior of the debtor, such as the debtor’s drunken driving).

A broader discharge of debts is available to a debtor in a Chapter 13 case than in a Chapter 7 case. As a general rule, the Chapter 13 debtor is discharged from all debts provided for by the plan except certain long-term obligations (such as a home mortgage), debts for alimony or child support, debts for most government funded or guaranteed educational loans or benefit overpayments, debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs, and debts for restitution or a criminal fine included in a sentence on the debtor’s conviction of a crime.

CAN MY BOSS FIRE ME FOR FILING BANKRUPTCY?
No. The Bankruptcy Code prohibits any employer from discriminating against you because you filed bankruptcy.

WILL FILING BANKRUPTCY AFFECT MY JOB?
A governmental unit or private employer may not discriminate against a person solely because the person was a debtor, was insolvent before or during the case, or has not paid a debt that was discharged in the case. The law provides express prohibitions against discriminatory treatment of debtors by both governmental units and private employers. A private employer may not discriminate with respect to employment if the discrimination is based solely upon the bankruptcy filing.

WHAT ARE THE COURT FILING FEES?
Presently, the Court charges a fee for filing Chapter 7 of $335.00. The Court’s filing fee for Chapter 13 is $310.00.  It is possible to ask the Court to allow you to pay this fee in installments.

WHO CAN FILE FOR CHAPTER 7?
In order to qualify for relief under Chapter 7 of the Bankruptcy Code, the debtor must be an individual, a partnership, or a corporation. An individual cannot file under Chapter 7 or any other Chapter, however, if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.

WHO CAN FILE FOR CHAPTER 13?
Any individual, even if self-employed or operating an unincorporated business, is eligible for Chapter 13 relief as long as the individual’s unsecured debts are less than $337,000 and secured debts are less than $1,010,000.  These figures are adjusted every three years.  A corporation or partnership may not file a Chapter 13 bankruptcy case. If a debtor exceeds these limits, then he or she must look to a Chapter 11 case should this type of protection from creditors be desired. A Chapter 12 bankruptcy is similar in nature to a Chapter 13, but is restricted to those individuals who earn a living from farming or fishing.

WHAT IS THE AUTOMATIC STAY?
Filing a petition under Chapter 7 or Chapter 13 automatically stays most actions against the debtor or the debtor’s property. This stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally cannot initiate or continue any lawsuits, wage garnishments, or even telephone calls demanding payments. Creditors normally receive notice of the filing of the petition from the clerk.

WILL FILING BANKRUPTCY PROTECT MY PROPERTY?
The automatic stay stops and prevents foreclosure, repossession, garnishments, collection calls, etc. Upon notice of the Chapter 7 or Chapter 13 case, creditors must cease attempting to collect from the debtor or the debtor’s property until further order from the bankruptcy court.

WHAT CAN I KEEP IF I FILE BANKRUPTCY?
You are allowed to keep certain assets, depending on the Georgia and Federal exemption law. In general, a debtor may claim exemption of his homestead and nonexempt personal property from attachment or execution of a judgment, or in a bankruptcy proceeding.

A debtor generally is entitled to exemption from levy and sale by virtue of any legal process any real or personal property, or both, in the amount of $5,600.00. If a debtor refuses to apply for exemption under this provision, his spouse, qualified representatives of his minor children or dependents, may make such application and the exemption is binding upon the debtor.

Some of the property which may be exempt includes:
● The personal and real property used by a debtor or his dependents as a residence or a burial plot, in the aggregate value of $21,500.00. A married couple filing can double this exemption.
● Social security benefits;
● Unemployment compensation;
● Local public assistance;
● Veteran’s benefits;
● Disability benefits;
● Alimony;
● Support or separate maintenance to the extent reasonably necessary for the support of the debtor and his or her dependents;
● Pension payments;
● Undistributed interest in a retirement plans or pension plans;
● Automobiles in the aggregate value of $5,000.00;
● Household furnishings and goods, wearing apparel, appliances, books, animals, crops, or musical instruments that are primarily for personal family or household use not to exceed $300.00 in value in each item but not to exceed $5,000.00 in aggregate value ($10,000 for married debtors);
● Jewelry in the aggregate value of $500.00 (double for married debtors);
● The debtor’s aggregate interest, not to exceed $600.00 in value plus any unused amount of the homestead exemption in any property, to a maximum of $5,600;
● Professional books or tools of the trade in the aggregate value of $1,500.00;
● An unmatured life insurance contract;
● The debtor’s aggregate interest in the loan value on any unmatured insurance contract not to exceed $2,000;
● Professional health aids;
● An award under a crime victim’s reparation law;
● Payment of not more than $10,000 from the recovery for personal injuries excluding pain and suffering or compensation for actual pecuniary loss; and
● Payment for compensation for loss of future earnings to the extent reasonably necessary for the support of the debtor and his dependents.

WHAT DON’T I KEEP?
Assets in excess of your allowed personal exemption, or non-exempt assets such as real estate, automobiles and boats may be liquidated by the trustee. You will want to discuss this with Ms. Rambeck before filing.

I HAVE FILED BANKRUPTCY BEFORE, WHEN CAN I FILE AGAIN?
A person can file Chapter 7 again if it has been more that 8 years since he or she has filed the previous Chapter 7 bankruptcy. However, a Chapter 13 case can be filed if it has been more than 4 years since a Chapter 7 discharge. The rules for filing successive cases are complex. We can explain the rules in a free consultation at a time that is convenient for you.

WHAT DEBTS ARE NOT ERASED BY A BANKRUPTCY? 
The following debts are not erased in both Chapter 7 and Chapter 13. If you file for Chapter 7, these will remain when your case is over. If you file for Chapter 13, these debts will have to be paid in full during your plan. If they are not, the balance will remain at the end of your case:
● Debts you forget to list in your bankruptcy papers, unless the creditor learns of your bankruptcy case.
● Child support and alimony
● Debts for personal injury or death caused by your intoxicated driving
● Student loans, unless it would be an undue hardship for you to repay
● Fines and penalties imposed for violating the law, such as traffic tickets and criminal restitution, and recent income tax debts and all other tax debts.

In addition, the following debts may be declared non-dischargeable by a bankruptcy judge in Chapter 7 if the creditor challenges your request to discharge them.  These debts may be discharged in Chapter 13.  You can include them in your plan, and at the end of your case, the balance is wiped out:
● Debts you incurred on the basis of fraud, such as lying on a credit application;
● Credit purchases owed to a single creditor in the amount of $600 or more for luxury goods or services made within 60 days of filing;
● Loans or cash advances (per line of credit) in the amount of $750 or more taken within 70 days of filing;
● Debts from willful or malicious injury to another person or another person’s property;
● Debts from embezzlement, larceny or breach of trust, and  ● Debts you owe under a divorce decree or settlement unless after bankruptcy you would still not be able to afford to pay them or the benefit you’d receive by the discharge outweighs any detriment to your ex-spouse (who would have to pay them if you discharge them in bankruptcy).

HOW DO I GET STARTED?
Call the office at 770-631-2334 and make an appointment for a free in-office consultation.
This firm is a debt relief agency and helps people file for bankruptcy relief under the U.S. Bankruptcy Code.