We all experience financial setbacks from time to time. But when money problems spiral out of control, it can feel hopeless. Fortunately, federal law offers relief in the form of bankruptcy. Individuals can choose from two types: Chapter 7 or Chapter 13. The more traditional form is Chapter 7, which involves selling or liquidating assets to pay creditors as much as possible, and the remaining debts are wiped away. Chapter 13 is more complex-debts are not erased, but reorganized, and a repayment plan structured over a period of time.
While bankruptcy is protected by federal law, each state has its own rules. Georgia residents who are considering filing should be aware of some key facts pertaining to their state.
Know Where to File Bankruptcy
In Georgia, you can file for bankruptcy in one of three districts:
- The Northern District has offices in Atlanta, Rome, Newnan, and Gainesville.
- The Middle District has offices in Columbus and Macon.
- The Southern District has offices in Augusta, Brunswick, Dublin, Savannah, Waycross, and Statesboro.
You must file in the district in which you live.
Can You File Chapter 7 Bankruptcy?
Not everyone is a candidate to file Chapter 7 bankruptcy. To file, your average monthly income must be less than the median monthly income in Georgia. If your average monthly income is equal to or greater than Georgia's median monthly income, you must pass a stringent means test before you can file Chapter 7.
How Long Does a Chapter 13 Repayment Plan Last?
The length of a Chapter 13 repayment plan is also based on your average monthly income. If you make less than Georgia's median income, your plan cannot last longer than 36 months, unless there is good cause to extend it, in which case it cannot exceed 60 months. If you make more than, or equal to, the median income in Georgia, your Chapter 13 plan generally must be 60 months in duration.
What Exemptions Are Available in Georgia?
If you are considering filing for bankruptcy, you may be wondering what property you'll be able to keep. Georgia, like other states, has outlined specific guidelines for property that is exempt. While some states allow you to decide whether to use the list of federal exemptions or state exemptions, Georgia is not one of them. In Georgia, you must use the state exemptions, which include:
- Real property—equity up to $21,500 ($43,000 if married, and the property is solely owned by one spouse)
- Motor vehicle— equity up to $3,500
- Personal and household items such as clothing, appliances, furniture, books, musical instruments, animals, and crops valued up to $300 per item and $5,000 total
Other exemptions include jewelry, lost future earnings, health aids, wages, retirement accounts, public benefits, items necessary for your work, alimony and child support, and certain types of insurance.
A Personal Bankruptcy Lawyer Can Help
Bankruptcy laws in Georgia can be complicated. For more detailed, specific information relative to your current position, please contact a Georgia bankruptcy lawyer.