Chapter 7 Bankruptcy
Both individuals and small businesses can find themselves with more debts than they can pay when due. In such cases, filing bankruptcy may provide a solution to what seems like an insurmountable problem. Bankruptcy law provides two basic forms of relief: (1) liquidation; and (2) rehabilitation, also known as reorganization. Most bankruptcies filed in the United States involve liquidation, which is governed by Chapter 7 of the Bankruptcy Code. A skillful attorney can advise individuals and businesses alike on whether Chapter 7 may be the right choice for them. The bankruptcy lawyer’s goals are to help debtors make a fresh start and ensure that creditors get paid.
Because bankruptcy law is primarily federal in origin, it varies little from state to state. The individual states do, however, retain jurisdiction over certain debtor-creditor issues that are not addressed by and do not conflict with federal bankruptcy law, such as which property remains exempt from creditors’ claims.
Chapter 7 Bankruptcy Relief Is Available to Both Individuals and Businesses
Chapter 7 bankruptcies, also called “liquidation bankruptcies,” are the most common form chosen by individual consumers. In a Chapter 7 “consumer bankruptcy,” individual debtors liquidate their assets in order to be relieved of their debts. The Chapter 7 proceedings begin with the debtor’s filing of a petition with the bankruptcy court, which triggers the “automatic stay” – bankruptcy terminology for the termination of all debt-collection activity. The court appoints a trustee who oversees a Chapter 7 case and liquidates the debtor’s assets in order to pay off the debts. In many cases, however, the debtor’s assets are exempt or already subject to valid liens, so there will be no assets to liquidate. If there are assets, the trustee collects the sale proceeds in a fund from which the debts are paid to the extent possible. When all of the proceeds are distributed, any remaining unpaid debts are discharged, meaning that they no longer exist and the debtor has no further obligation to pay them. Some debts, however, are non-dischargeable, such as taxes, damages resulting from the debtor’s willful or malicious acts, debts incurred by giving false financial information, domestic support obligations, and some debts incurred just prior to filing for bankruptcy.
Business Chapter 7 Bankruptcy
“Commercial bankruptcy” is a remedy available to businesses that are unable to pay their debts. Chapter 7 business liquidations are conducted in significantly the same manner as Chapter 7 consumer bankruptcies. In other words, many of the business’s assets are sold and the proceeds are divided among the company’s creditors. When the debtor is a corporation, it ceases to exist after liquidation and distribution, and there is therefore no reason for further discharge because the creditors cannot seek payment from an entity that no longer exists.
IF YOU ARE FACING FINANCIAL PROBLEMS SAEDI LAW GROUP CAN HELP YOU REVIEW ALL BANKRUPTCY AND NON-BANKRUPTCY OPTIONS AVAILABLE. CALL US TODAY AND STARTED ON THE PATH OF FINANCIAL FREEDOM.
The Means Test: Do You Pass?
If you want to file for Chapter 7 bankruptcy, you must pass the means test. The means test looks at your income, and in some cases, your expenses and debts, to determine whether could afford to pay back some of your debts. If so, you won’t be allowed to use Chapter 7; instead, you will have to use Chapter 13 if you want to file for bankruptcy.
To take the means test, you must first compare your monthly income in the six months before you file for bankruptcy to the median income in your state. If your income is less than the median, you have passed the means test and are eligible to use Chapter 7. If your income exceeds the median, you must figure out whether you would have enough left over, after subtracting certain expenses, to repay some portion of your debt.
Saedi Law Group specializes in bankruptcy law and can assist debtors in overcoming their financial obstacles.
This will probably be one of the most important financial decisions of your life. Expert advice is required to make the best financial and legal decision. Only an experienced bankruptcy attorney can provide that essential advice whether you are a debtor considering voluntary bankruptcy or facing an involuntary bankruptcy proceeding.
Contact Saedi Law Group TODAY at 404-889-8663 for more Information on Georgia bankruptcy law.