How Long Does it Take to File Bankruptcy in Georgia?
If you are looking to file bankruptcy in Georgia, the length of time it takes to file your case and obtain a discharge depends on whether you file a Chapter 7 or a Chapter 13 bankruptcy case. Today, we will review the timeline for a Chapter 7 bankruptcy case in Georgia. Click to see a review on the timeline for a Chapter 13 bankruptcy in Georgia.Chapter 7 Bankruptcy Cases in Georgia
A typical Chapter 7 case in Atlanta takes about 4 to 6 months from filing to discharge if it involves no assets and an income that is less than median income for your household size. A Chapter 7 bankruptcy case is a case where you list all of your assets and all of your debts and allow a person called the bankruptcy trustee to investigate to see whether you have any property that can be sold to repay creditors. If there are no assets to sell or if all of your property is protected by the available Georgia bankruptcy exemptions, then your case will likely close quickly. The typical and most simple timeline for a Chapter 7 looks like this:
- File your petition with the court and get a case number immediately;
- A bankruptcy stay or protection from all creditor collection activity is immediately issued;
- Clerk of Court notifies creditors via regular U.S. mail within a week;
- A hearing known as the Meeting of Creditors is scheduled about one month after you file your case;
- The Chapter 7 trustee issues a report stating whether there are assets that can be liquidated to repay creditors;
- Creditors have about 90 days from the date of the filing of your petition to file an objection to dischargeability;
- You have 45 days after the date of your Meeting of Creditors to do a financial management course and file it with the court;
- The Court issues an order discharging your debt after the deadline for objections passes.
Sometimes, issues such as high income, self-employment, and unprotected assets can cause a Chapter 7 case to pend for more than 6 months or even years. Some factors that can cause a Chapter 7 in Atlanta, Georgia to linger include:
Assets. Where a Chapter 7 debtor has assets that can be sold to repay creditors, a Chapter 7 trustee will hold the case open to liquidate and administer assets. Most debtors do not have any assets that can be sold because there are protections or “exemptions” that can be applied to typically owned items such as homes, cars, retirement accounts and bank accounts pursuant to Georgia and federal bankruptcy laws.
Income. Where a debtor earns more than the average income for his or her household size in Georgia, s/he can still qualify for a Chapter 7 bankruptcy case if there are available deductions to show that there is no available disposable income with which to repay creditors. For example, expenses such as out-of-pocket medical expenses, educational expenses for dependent children, childcare, taxes, or food/transportation may be deducted on that income test (which is known as the “means test”). Many times, where a debtor makes significantly more income than average, the U.S. Trustee’s office reviews income and expenses to ensure that the debtor’s deductions are legitimate and whether the debtor’s circumstances show that s/he cannot repay debt. This review process can cause a Chapter 7 bankruptcy case to pend for quite a long time because the U.S. Trustee’s office must review documents and conduct investigations into the debtor’s case in order to make its determination.
Objections to Discharge. All parties have the right to object to a debtor’s bankruptcy discharge. When creditors file objections to discharge or “adversary proceedings,” the Chapter 7 bankruptcy case may close, but a new case is created involving litigation between the creditor who filed an objection and the creditor. The adversary proceeding is a case where the issue is whether the debt with that particular creditor should be discharged.
Liens. If a debtor has liens on property that need to be avoided, a Chapter 7 could be prolonged in order to file motions to remove those liens. For example, if a debtor has been sued and garnished, it means that a creditor obtained a judgment against the debtor. Typically, creditors with judgments also files liens against the debtor’s property. Thus, under bankruptcy law, a debtor may file a motion to “avoid” the lien. Depending on when the motion is filed, it could cause the case to stay open for the resolution of the motion. There are also other types of liens, such as mortgage liens, that may be “stripped” based on the value of the house being insufficient to attach value to the lien; Courts have allowed debtors to strip 2nd mortgage liens in Georgia Chapter 7 cases.
Although most Chapter 7 bankruptcy cases in Georgia are closed and discharged within 4 to 6 months, there are a few more complex cases that may pend for longer periods of time. It is advisable that any debtor with complex issues consult with a qualified Atlanta bankruptcy attorney in order to ensure a successful close and discharge. Call the Law Offices of Charles Clapp at 404.585.0040 for a free consultation.