770-609-1247 | Chapter 7 Bankruptcy: Personal & Business

Coleman Legal Group, LLC

Call 770-609-1247 to Speak With an Experienced Roswell Georgia Bankruptcy Attorney.

Personal, Joint and Individual Chapter 7 Bankruptcy Cases

Chapter 7 Bankruptcy cases are frequently filed in the United States because it is one the quickest ways to relieve someone of debts that cannot be paid under any reasonable circumstance. Credit card bills, law suits, utility bills, medical bills, contract obligations, tax debts, personal loans and garnishments are just some of the debts and issues Chapter 7 can eliminate. 

When filing a Chapter 7 personal bankruptcy case, there are options you can choose from in the treatment of certain debts. For example, you can redeem a loan, which means that as long as you can pay your creditor a certain portion of the debt, the US bankruptcy code will allow for the remaining portion to be discharged. You also have the options of reaffirming a loan, which means that you agree in writing to continue to pay a portion or the entire balance of a loan following a discharge (e.g. automobile loans and mortgages). If you cannot afford the payments on a secured loan, you have the option of surrendering the collateral (e.g. home, real property, automobile, etc.) subject to a secured loan to the creditor(s) and totally discharging the debt.

In a personal Chapter 7 case you can file alone or a joint case with your spouse.  To file a personal Chapter 7 case, a means test, credit counseling, and debtor education requirements must all be satisfied to receive a discharge. A means test is to evaluate from results whether you are eligible for a Chapter 7 based on your income. This test composes of two parts, and you only need to pass one to qualify for a bankruptcy. The median income part of the means test compares your six (6) month average household income to the median income in your region (based on IRS tables).  Your six (6) month average income must be below the median income for your regions to automatically pass the means test. However, if your six (6) month average income is greater than the median for your region, you will need to pass the disposable income part of the means test.   It has been our experience that most people seeking bankruptcy assistance will pass this test if needed.  But specifically, the purpose of the test is to calculate whether your disposable income is less than approximately one hundred twenty five dollars ($125) each  month – and if it is, you qualify for a Chapter 7 bankruptcy. The bankruptcy means test allows several deductions from your income as a part of the calculation.  These deductions include, but are not limited to: secured debt payments including mortgage and car payments, installment loans (e.g. furniture, etc.), state and federal taxes paid and owed, some utility services, medical expenses, health insurance expenses, charitable contributions, child support paid, alimony paid and aid paid to help needy family members. Besides the means test, credit counseling and debt management course is required to assure basic training on how to balance your future credit.  And yes, you will be able to have a great credit score after filing bankruptcy – and probably much faster than you expect.

Business Chapter 7 Bankruptcy Cases

For a business to file bankruptcy, it must be official organized in the form of a corporation, LLC, LLP or some other recognized business entity.  Sole proprietorships do not qualify for business Chapter 7 bankruptcy cases.  An organized business would usually be a good candidate for a Chapter 7 bankruptcy case when it has no significant assets and no reason to continue as a business due to overwhelming debts. Unlike a person, a business filing a Chapter 7 does not get a bankruptcy discharge.  Upon the filing of a business Chapter 7 bankruptcy case, the court expects the business to cease all operations awaiting liquidation of the business’ assets. The liquidation of the business’ assets involves an appointed Bankruptcy Trustee liquidating the business’ assets (if it has any) to pay back creditors, administrative and legal expenses. Upon the filing of a business bankruptcy, the creditors are notified of the bankruptcy so that they can file a “proof of claim” with the court stating how much the debtor business owes to them.  If there are business’ assets of little value – the Bankruptcy Trustee has the options of “abandoning” the assets – usually resulting in the business owner(s) retaining the abandoned assets. Secured credit holders will usually work with the Bankruptcy Trustee to take any secured assets they may have a valid lien over .

The Automatic Stay

The “automatic stay” goes into effect the instant a business files a Chapter 7 case.  Under the automatic stay, the business’ creditors cannot continue collection efforts or take action against the business. As a part of a business bankruptcy, the Bankruptcy Trustee conducts a meeting (341 hearing) with a representative of the business.  The business’ creditors are allowed to attend this meeting and ask questions.  However, it has been our experience that few if any creditors ever attend a 341 meeting. However, the results of the 341 meeting are reported back to the court by the Bankruptcy Trustee. The creditors that have filed proof of claims are then ranked and paid back depending on the their priority under bankruptcy law.  For example, debts such as taxes and employees’ benefits are paid before general unsecured loans. The case trustee handles the liquidation of the debtor’s assets – frequently through one or a series of auctions. Once the business bankruptcy case is closed by the court, the business no longer exists as an ongoing entity and is closed. However, copyrights, trade names, trademarks, patents and other forms of intellectual property can also be liquidated and appear in the market in the future. One example of this is the Webvan trade name resurrected by Amazon.com.

Coleman Legal Group, LLC handles cases in the following cities and communities: Atlanta, Alpharetta, Roswell, Johns Creek, Milton, Cumming, Marietta, Sandy Springs, Woodstock, Kennesaw, Gainesville, Norcross, Lawrenceville, Midtown, Inman Park, Duluth, Buckhead, Dunwoody, Vinings and Smyrna.

Our attorneys frequently handle cases for clients residing in the following counties: Fulton, Gwinnett, Forsyth, Cobb, DeKalb, Henry, Cherokee, Douglas, Carroll, Coweta, Paulding, Bartow, Hall, Barrow, Walton, Newton, Rockdale, Henry, Spalding, Fayette and Clayton.

Coleman Legal Group, LLC’s Georgia lawyers practice in the areas of Bankruptcy, Divorce, Family Law, Immigration and Business Law. We have two convenient offices located at:

Alpharetta Georgia Office
5755 North Point Parkway
Suite 52
Alpharetta, GA 30022

Atlanta Georgia Office
659 Auburn Avenue Northeast
Atlanta, GA 30312

Copyright © 2014 | Coleman Legal Group, LLC | All Rights Reserved. Coleman Legal Group, LLC • 5755 North Point Parkway, Suite 52 • Alpharetta, GA 30022 • 770-609-1247 DISCLAIMER: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

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