Also known as liquidation bankruptcy, Chapter 7 allows debtors to secure a fresh financial start. After selling nonexempt assets and using the proceeds to pay back creditors, petitioners may discharge any applicable debts that remain. For more detailed information about the Chapter 7 bankruptcy proceedings, here are the answers to some of the most frequently asked questions on the subject.

Chapter 7 Bankruptcy FAQ

Who is eligible for Chapter 7?

If you earn more than the state’s median income for a household of your size, you’ll have to pass a means test before filing Chapter 7. If your household includes four people, for example, your annual income cannot exceed $82,476 to pursue Chapter 7 in Georgia—unless applicable expenses make you eligible despite having more earnings.

What kinds of debt are not dischargeable under Chapter 7?

Chapter 7 can help you eliminate all kinds of debt, including medical bills, credit card debt, personal loans, past-due utility bills, and repossession deficiency balances. In most cases, though, it cannot discharge student loans, tax obligations, past-due child support, past-due alimony, or criminal fines. To see which of your debts are dischargeable, schedule a consultation with a seasoned bankruptcy attorney.

How long do the Chapter 7 proceedings take?

Because every Chapter 7 case is different, there’s no standard timeline for discharging debt. Generally speaking, most cases are resolved within four to six months. The actual filing, however, will remain on your credit report for 10 years.

Should I hire an attorney for help with the filing process?

While it’s possible to pursue bankruptcy without legal counsel, it’s wise to consult a lawyer before filing. An attorney will help you navigate every stage of the proceedings and ensure you don't commit bankruptcy fraud inadvertently. If you gift fairly significant assets shortly before filing, for example, the court may assume you're trying to shield them from liquidation—even if you had been intending on giving them away for years.

To see if you’re eligible for Chapter 7 bankruptcy, turn to Hurtt & Johnson, LLC. Practicing out of Dalton and serving all of Northwest Georgia, this firm has been counseling clients for over 40 years. With a medal of excellence from the American Bankruptcy Institute, they strive to provide personalized and attentive guidance to every client. To learn more about their bankruptcy services, visit their website. To schedule a consultation, call (706) 226-5425.