Before you file for bankruptcy, you probably have some questions about the process. There are many laws and guidelines you need to follow, but there is still a basic format for filing. In this article, we will cover the steps of the bankruptcy process to give you a better understanding of what it looks like. If you want to learn more, our Georgia bankruptcy attorneys are here to help.
Due to the 2005 Bankruptcy Act, before individuals file for bankruptcy in Georgia, they need to receive credit counseling from a government-approved organization within the six months prior to filing. This rule applies whether you file for either Chapter 7 or Chapter 13 bankruptcy. After filing, you must also complete a financial management instructional course.
Read more on: The differences between Chapter 7 and Chapter 13
The Means Test
When you file for bankruptcy, you may choose Chapter 7 or Chapter 13 bankruptcy, depending on your financial situation. The means test calculates your ability to pay back your debts based on your income and necessary expenditures. The court will look at your finances and compare them to the median income for Georgia. If your income is less than the median, you qualify to file under Chapter 7. If your income is higher, you may only have the option of filing for Chapter 13 bankruptcy. However, even if you qualify for Chapter 7, you may choose Chapter 13 bankruptcy if you have secured property that you wish to keep in the process.
When filing, you will need to acquire any relevant financial information such as income sources, large financial transactions within the last two years, living expenses, debts, and property. Keep your tax returns for the previous two years, property deeds, car titles, and loan paperwork on hand.
Filing for Bankruptcy
When you file, either you or your attorney will file a petition and other required forms with your Georgia district bankruptcy court. In these forms, you explain your financial situation and transactions within the last few years. It is important to mention all aspects of your financial status. Any withheld information can jeopardize your petition for debt relief.
If you file for Chapter 13 bankruptcy, be aware that you must also submit a proposed repayment plan. A bankruptcy judge either confirms or denies your proposal at a hearing later on. You will need to attend this hearing.
Filing for Chapter 7 bankruptcy carries a fee of $306. If the fee is not waived, you can pay it in installments. However, the Chapter 13 bankruptcy fee of $281 cannot be waived.
Once you file, an automatic stay goes into effect. Creditors may no longer have direct contact with you, and foreclosure proceedings will halt. The court then appoints a trustee to your case to review your paperwork and ensure creditors are paid accordingly.
Meeting of Creditors
About a month after filing, the trustee will hold a meeting of creditors. The debtor is required to attend as well. The meeting allows creditors to question or object to the proposed plan.