Chapter 7 Bankruptcy Attorneys in Savannah Help You Restart Your Financial Life

Chapter 7 bankruptcy is a legal process by which most unsecured debts can be discharged, or wiped out. If you file a Chapter 7 bankruptcy, your assets (house, cars, etc.) can be sold by the bankruptcy trustee for the benefit of creditors. It is important to have an experienced bankruptcy attorney who can be sure that this does not happen to you.

A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Part of the debtor’s property may be subject to liens and mortgages that pledge the property to other creditors. In addition, the Bankruptcy Code will allow the debtor to keep certain “exempt” property; but a trustee will liquidate the debtor’s remaining assets. Accordingly, potential debtors should realize that the filing of a petition under chapter 7 may result in the loss of property.

One of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a “fresh start.” The debtor has no liability for discharged debts. In a chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or corporations. 11 U.S.C. § 727(a)(1). Although an individual chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged.

To file for Chapter 7 bankruptcy, you must qualify under the Chapter 7 means test. The means test first compares your income to the median income in Georgia. If your income is lower than Georgia’s median income, you can file for Chapter 7 bankruptcy. However, if your income is greater than the median income, other calculations regarding your income and allowable expenses are required to determine whether or not you can file for Chapter 7 bankruptcy. It is a complicated formula, and it is important to have an experienced bankruptcy lawyer on your side when preparing the petition.

If you are considering Chapter 7 bankruptcy, please contact Gastin & Hill to schedule a free initial consultation with one of our experienced bankruptcy attorneys.