Ward & Spires, LLC

Due to precautions related to COVID-19, we have expanded our options for remote consultations. Please contact our office to discuss whether a full phone consultation or video conference is appropriate for your situation.

Personal Bankruptcy FAQ
  1. Home
  2.  → 
  3. Personal Bankruptcy
  4.  → Personal Bankruptcy FAQ

Our Experienced Lawyers Can Answer All Your Bankruptcy Questions

You might be leery of filing for bankruptcy. It seems too good to be true. Or you might have questions about a specific scenario. Every case is different.

The attorneys of Ward & Spires, LLC, address some of the common questions about bankruptcy in Georgia to give you an overview and make it less intimidating to start the discussion. We invite you to arrange a consultation at 706-250-7797 to explore your options in detail.

What exactly is bankruptcy?

Bankruptcy is a federal law created to help people who have fallen deeply into debt, whether through personal hardships or poor habits. Bankruptcy is a one-time opportunity for a fresh start, to eliminate certain debts entirely or to keep creditors at bay while debts are repaid over time.

What is the difference between Chapter 7 and Chapter 13 bankruptcy?

In a nutshell, Chapter 7 erases debts and Chapter 13 is a debt repayment program. Chapter 7 may be the solution if you mainly have unsecured consumer debt such as credit cards, medical bills and utility bills. Chapter 13 may be the answer if your income is too high for Chapter 7 or if you are in arrears on mortgage or car payments and want to prevent foreclosure or repossession.

What is the “means test”?

The means test is a formula to determine whether you qualify for a bankruptcy discharge (Chapter 7) or a payment plan (Chapter 13). It is based on income, the number of people in your household and other factors. Our attorneys can help you fill out the complicated forms to determine where you stand.

What debts can be discharged in bankruptcy?

Bankruptcy can eliminate most unsecured debts: medical and credit card debt, judgments, utility bills, unsecured loans and even some older tax debts. Bankruptcy does not apply to student loans, child support, alimony, criminal fines, recent taxes or debts that are secured by collateral such as a car loan or mortgage.

Will I lose everything if I file for bankruptcy?

No. To the contrary, bankruptcy helps you protect what you own. In a Chapter 7, you may have to surrender some assets to the bankruptcy court in exchange for discharging debts, but most assets are protected under the Georgia bankruptcy exemptions. For example, you can keep all pension and retirement savings, and up to $21,000 in home equity, plus many other exemptions. In Chapter 13, you do not forfeit any assets.

Can creditors still try to collect debts?

No. Filing for bankruptcy invokes an automatic stay. Creditor harassment and wage garnishment stop. Home foreclosure and vehicle repossession are halted at least temporarily. Once you are under the protection of the bankruptcy court, creditors cannot touch you or even contact you.

Won’t bankruptcy ruin my credit?

If you are deep in debt and paying bills late, your credit rating is already poor. A bankruptcy does stay on your record for 10 years but matters less and less as time goes by. Rebuilding your credit begins soon after your debts are discharged. Within a year or two, most people can qualify for credit cards and loans, even mortgages.

Will I have to go to court?

Yes, but it is not a “trial.” Creditors can challenge a Chapter 7 discharge but almost never do. The bankruptcy judge may ask you some clarifying questions about your debts, assets, expenses or income. There is one court appearance for a Chapter 7; you will be notified if your discharge is granted. For a Chapter 13, there is a second hearing to confirm that creditors are on board with your payment plan.

More Bankruptcy Questions?

Our attorneys can address your specific circumstances and help you take full advantage of bankruptcy. Ward & Spires, LLC, handles personal bankruptcies in the Augusta area and throughout Georgia. For a consultation, call 706-250-7797 or use our email form.