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Georgia Bankruptcy Laws

Georgia Bankruptcy Laws should be known by every resident of the state of Georgia. Bankruptcy laws evolve through time. With the continuous change in bankruptcy laws it is important to note the most important changes made. For example, one of the most recent changes made to federal bankruptcy laws in October, 2005 imposes stricter rules when applying for bankruptcy and requiring more paper work to accomplish to avoid bankruptcy fraud. The same holds true for Georgia bankruptcy laws. There may be variations when it comes to filing methods, fees, and exemptions and it is your duty as a citizen to know your bankruptcy rights.

One of the most common reasons why an individual, a married couple, or a family declare bankruptcy is the accumulation of extremely high debts. Before you make the final decision to file for bankruptcy the court mandates you to attend a complete credit counseling program. If you are really set to file for bankruptcy make sure to consult a lawyer. A lawyer who is well-experienced in the field of bankruptcy laws in the state of Georgia will be an advantage in the long run.

The first thing that a lawyer may want to discuss with you is the difference between Chapter 7 and Chapter 13. If you want the fast and easy way to get rid of outstanding debts, Chapter 7 should be your choice. However, since the new bankruptcy laws went into effect stricter rules have been imposed. There have been a lot of fraud cases in the past with regard to bankruptcy application. Due to this, the court has devised a way to screen applicants of Chapter 7 bankruptcy. A means test is conducted to determine if a debtor’s annualized monthly income compared with the current mean income of Georgia is lower or higher. A debtor will be eligible for Chapter 7 if the test results will show a lower income than the state income level. It is the sole responsibility of the trustee assigned to the case to analyze the test results.

The other debt management option available for the debtor is Chapter 13 bankruptcy protection. Furthermore, if you have recently purchased a house or a car and you want to avoid its seizure, you can opt to choose Chapter 13. This kind of bankruptcy is a restructuring plan to repay all your creditors through monthly payments made through your trustee. The repayment plan should clear all your debts by 5 years. During this period, the court applies the automatic stay policy to all your creditors. In layman’s term, an automatic stay will temporarily stop the barrage of phone calls and overdue mails cluttering in your mailbox you have been receiving.

Although federal laws have set forth the exempted assets, Georgia bankruptcy laws have given debtors a choice by coming up with lenient state exemptions to protect its citizens from creditors. The state of Georgia includes the following as exemptions:

• Your home provided that you and your dependents live there for up to $10,000;
• Interest in up to $3,500 of your automobile;
• 75% of debtor’s weekly earnings;
• Personal items like clothing, pets, books, appliances, musical instruments and more, each up to $300, but must not exceed a total value of $5,000;
• Jewelry worth $500;
• Professional books and/or tools of the trade worth $1,500; and
• Health aid, public benefits, life insurance, and alimony.

There can be many mishaps during bankruptcy application, it is important that you seek the assistance of your lawyer to process all the paper works and ensure that your application is filed properly.