Nobody wants to have to file for bankruptcy. In terms of legal options for people, it is intended as a kind of last resort for those experiencing financial difficulties. With that being said, however, bankruptcy can sometimes be the best or only option for people stuck with overwhelming debt and should be considered if you find yourself in this position.
Chapter 7 and Chapter 13 Bankruptcy Filings
There are two primary kinds of bankruptcy cases that you can consider if you are dealing with debt. You can opt for a Chapter 7 case, which is designed to eliminate debts quickly, or you can choose to file a Chapter 13 case, which is built around setting up a payment plan. This payment plan usually involves paying off your debt over 3 to 5 years and discharging whatever is left.
Filing for bankruptcy under Chapter 7 involves completing the Chapter 7 Means Test. This test compares your income to the average income of households in Georgia. To qualify for this portion of the Means Test, your average income must fall below your home state’s median income.
It is worth noting that even if your income exceeds the median, you have a second chance to qualify for Chapter 7 relief. Completing the second section of the Means Test determines if your disposable income is below a certain amount. If it is, you should still be able to file under Chapter 7.
How to Prepare for Bankruptcy
Before you even consider which Chapter you intend to file under, you need to gather as much proof of your income as possible. Collect copies of your tax returns and your proof of income for the past six months. You will also want to collect copies of your credit reports, which you can gather online every 12 months for free.
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Ensure that you note every creditor on your credit report as you prepare for a bankruptcy filing. You must include all secured, unsecured, and priority unsecured creditors as you prepare for bankruptcy. If you do not include each creditor as you prepare for your filing, you will still owe that creditor after completing your bankruptcy case.
When you sign your bankruptcy forms, you confirm that you have included every debt you owe under oath, which is why credit reports are so helpful to ensure you don’t miss any creditors. Along with reporting your debts, income, and expenses, you will also be required to report all of your assets, including any property you own and its respective value.
Let Us Help
If you feel overwhelmed at this point, don’t worry, there is a lot of information to collect and a lot of details to complete. Our attorneys are highly trained in bankruptcy cases and will be happy to help you with the process of filing for bankruptcy.
Please feel free to reach out to us at (678) 883-7081 to schedule a consultation with a Cobb County bankruptcy attorney. We will go over all of your paperwork with you and offer recommendations on what path you should take to get you out from underneath your debt.