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Bankruptcy is a great tool for those struggling with large amounts of debt or facing imminent collection action. It is very affordable and can take care of multiple financial issues at one time. Individuals often file bankruptcy for various reasons. The most common reasons people file bankruptcy in Atlanta, Georgia is due to Medical Bills, Personal Injury, Joss Loss, Loss of Income, Small Business Loans, and Credit Card Debt. Bankruptcy is an excellent tool because it can IMMEDIATELY stops the following collection action:

  • IRS Bank and Wage Levies
  • Judgment Creditor Bank Levies
  • Judgment Credit Wage Garnsihments
  • Seiuzres
  • Foreclosures
  • Repossessions

The goal of bankruptcy is to provide the honest but unfortunate debtor a fresh start. A bankruptcy case commences with the filing of the petition and in most cases is filed voluntarily by debtor.

There are six different chapters of bankruptcy; however, the most common chapters are the following:

  • Chapter 7
  • Chapter 13
  • Chapter 11

A Chapter 7 Bankruptcy is a liquidation bankruptcy that allows most individuals to complete get rid of their unsecured debt such as credit card debt, medical bills, old utility bills, and old apartment leases. A debtor can keep a home or car in a Chapter 7 but they must be and remain current on their monthly payments. To qualify for a Chapter 7, the debtor must have not filed Chapter 7 bankruptcy less than eight years ago and meet an income test called “the means test.” The means test uses the median income for your household size and expenses based on the IRS standards of living. Even if you are over the means test, some individuals still may be able to qualify for a Chapter 7 in Georgia because the means test allows for necessary expenses such as mortgage payments, medical bills, childcare, health insurance, taxes, and other allowed expenses. If more than 50% of the total debt is not-consumer debt or business debt, the debtor can avoid the means test entirely and file a Chapter 7 under the Business Debt Exception. Non-consumer debt includes taxes and essentially any debt that was NOT used to pay a personal, family, or household expense. Since taxes are considered a non-consumer debt, a Chapter 7 is a great option for anyone that has dischargeable tax debt and their tax debt is more than 50% of their total debt.

In a Chapter 7, the trustee takes control over debtor’s assets and sells any unexempt property to pay back creditors. Most debtors do not have any assets of value or nonexempt assets to be liquidated. This is due to the fact that the bankruptcy code allows exemptions on real and personal property so that the debtor will have something when they exit bankruptcy. Although bankruptcy is federal law, each state may choose to use its own exemptions. In Georgia, a debtor can exempt up to $21,500.00 in real estate under the homestead exemption and $5,000.00 in a vehicle, in addition to many other exemptions provided by O.C.G.A. 44-13-100. A full listed of exemptions can be found here. In most cases, the debt will be discharged and the debtor is released from all personal liability, i.e. will not have to pay any amount back to creditors. However, some debts are not-dischargeable and may remain after the bankruptcy case.

A Chapter 13 is a debt reorganization for individuals with a regular steady source of income. Although there is no test for a Chapter 13, there are limits on the amount of debt that can be handled in a Chapter 13 case. The unsecured debt limit is $394,725.00 and secured debt limit is $1,184,200.00 (valid through 2019). Thus, if a debtor is looking to file a Chapter 13 and their debt exceeds these limits, they will be ineligible. The Chapter 13 plan allows the debtor to pay back creditors over a three to five year period. A Chapter 13 is used in cases where the debtor does not qualify for a Chapter 7 because their income exceeds the means test or they have property with equity that they would like to keep such as a house or a car.

A Chapter 11 is a reorganization typically used by companies to continue operating a business and repay creditors through a court approved plan. However, a Chapter 11 can also be filed by high net worth individuals who do not qualify for a Chapter 7 or over the Chapter 13 debt limit.

Each chapter of bankruptcy has pros and cons and not all debts are dischargeable. In addition, some tax and/or tax liens may remain after your bankruptcy case. Due to the very complex nature of tax and the requirements for tax dischargeability in bankruptcy, many bankruptcy attorneys are not able to provide their clients a comprehensive analysis of their debt and how it will be treated in bankruptcy. Our firm is able to give clients a complete analysis and post bankruptcy options for any debt that may survive the bankruptcy.

If you would like more information please contact us today at (404) 551-5838 for a free one hour consultation with Alyssa Maloof Whatley, Atlanta Tax and Bankruptcy Attorney.

I run a CPA firm and Alyssa has helped my clients that have IRS issues. Her expertise ends up giving the clients more favorable tax liability positions than they had before. She is enjoyable to work with and communicates clearly and to the point. I have learned a lot from her due to her immense tax resolution knowledge.
Alyssa Whatley helped us with a major tax issue that seemed impossible and she seemed to do it with ease. She helped us through a very difficult and hard time. Alyssa's work ethics and performance set a very high standard that we value. She works with strong intention and honesty. She represented us so well and gave us honest answers. She was careful and this made us know that she is trustworthy. We knew that she really wanted to help us and that is her heart for why she does what she does. Alyssa has an endearing confidence that gave us assurance and a calm knowing that she is very knowledgable and good at what she does! Alyssa always responded promptly to us and kept us very informed. She is definitely at the top of her game in her field! Thankful to have had her representing us! Lindy
Alyssa immediately impressed me with her competence. That was most important to me. How well will my attorney do their job for me? Alyssa knocked it out of the park for me. Her understanding of our overly complex Tax laws never ceased to amaze me. Alyssa seemed to know every trick in the book to achieve the best results. Alyssa analyzed my state of affairs and delivered better results than I had hoped for. Before meeting Alyssa, I was wary about whether my attorney would have _my_ best interest at heart? I did not expect a cheerful attorney; What a difference a smile makes when you're going through troubled waters. Alyssa deserves my highest recommendation. I just wish I could express my appreciation better. Job well done, Alyssa! Thank you! Anonymous
I contacted Alyssa after I was wrongfully imprisoned due to a clerical error by Fulton Co. Alyssa listened with empathy to my entire story and took all of the correct steps in handling my case. Alyssa updated me frequently on my case so that I could rest assure it was in the right hands. Alyssa was able to get my case dropped and my money returned very quickly. Mrs. Whatley came highly recommended to me and I see why. Alyssa's professionalism, experience, compassion, and positive attitude was exactly what I needed during this time of uncertainty. Kaitlin
Mrs.Whatley handled a case for us with the IRS. We had tax liens after a Chapter 13 bankruptcy and she was able to have them removed promptly. She is extremely knowledgeable about tax law and I'd recommend her to anyone, including my own family and friends. Keith