How Chapter 7 Works
Chapter 7 bankruptcy is also known as a liquidation plan. In a Chapter 7 Bankruptcy, we show the Georgia Bankruptcy Court that, based upon your budget, you are unable to service the debt you carry. That’s it. Approximately 90 days after we file, you are granted a discharge, and you no longer owe the debt. Period.
Now, while a Chapter 7 Bankruptcy is simple in theory, there are a number of factors to consider:
- First, you must qualify financially through a mandated “Means Test.”
- Not every kind of debt can be discharged in a Chapter 7 Bankruptcy. Debts arising from taxes, student loans, alimony, child support, drunk driving, or intentional acts may not be dischargeable.
- If you have secured debt (debt tied to collateral like a car note or a mortgage), you have to decide if you wish to keep the property. If so, you must reaffirm the debt, which effectively takes it out of the bankruptcy.
Not sure whether Chapter 7 or Chapter 13 is right for you? Learn about Chapter 13 or contact us for a free consultation.