A fresh start from credit cards, medical bills and other unsecured debt, usually in about three to four months.
Our bankruptcy legal team has over twenty years of experience helping people and businesses deal with crushing debt and get immediate relief. Call 770-609-1247 to speak with an experienced Georgia bankruptcy lawyer.
What Chapter 7 Can Do for You
Chapter 7 bankruptcy, often called “liquidation” or “straight” bankruptcy, is the most commonly filed type of bankruptcy in the United States because it remains one of the quickest ways to wipe out unsecured debt, usually within a few months.
Debts Chapter 7 Can Wipe Out
- Credit card debt
- Medical bills
- Utility bills
- Personal loans
- Payday loans
- Collection accounts
- Old lawsuit judgments
- Personal guarantees of business debts
- Some older income taxes (when certain timing and filing rules are met)
Filing Also Stops
- Wage and bank account garnishments
- Collection calls and letters
- Lawsuits by creditors
- Apartment and rental evictions (in most cases, if the landlord does not already have a judgment for possession before you file), which can give you time to plan a move
- Car repossessions and foreclosure sales (at least temporarily)
Some debts, like child support, most student loans and recent taxes, usually can’t be wiped out. See the full list.
Typically, Chapter 7 is a good fit for people who have lower income, a large amount of unsecured debt, and few valuable assets beyond what Georgia’s exemptions protect. See what Georgia lets you keep.
Who Qualifies: The Means Test
To file a Chapter 7, three requirements must be met: the means test, credit counseling before you file, and a debtor education course before your discharge. The means test looks at your income to decide whether you are eligible for Chapter 7. It has two parts, and you only need to pass one:
- Median Income TestYour average household income for the six months before filing, multiplied out for a year, is compared to the Georgia median for your household size. If yours is below the median, you pass.
- Disposable Income TestIf you are above the median, allowed living expenses and certain debt payments are subtracted from your income. You pass if what’s left is less than about $171 a month ($10,275 over five years). Above about $286 a month ($17,150), Chapter 7 generally isn’t available. In between, it depends on how much unsecured debt you owe.
11 U.S.C. § 707(b). Dollar figures apply to cases filed on or after April 1, 2025; Georgia median incomes are updated regularly by the U.S. Trustee Program. The means test applies only when your debts are mostly consumer debts. If you don’t pass, Chapter 13 may still help.
- Credit counseling: basic training on budgeting and managing credit, from an approved agency, completed within 180 days before you file. It can be done online, by phone or in person.
- Debtor education: a short financial management course, much like a money-management class, completed after you file and before your discharge.
The Chapter 7 Timeline
- Free ConsultationWe review your debts, income and credit report, and tell you whether Chapter 7 fits.
- Credit CounselingComplete the required course, often the same day.
- We File Your CaseThe automatic stay starts immediately and stops collection.
- Meeting of CreditorsAbout three to six weeks after filing, a short meeting with the trustee. Creditors rarely attend.
- Debtor EducationComplete the financial management course.
- DischargeUsually about two to three months after the meeting of creditors. Your qualifying debts are wiped out.
Your Options for Car and House Loans
When filing a Chapter 7, there are several options for property that secures a loan, such as a car or a house:
Reaffirm the Loan
Sign an agreement to keep paying the loan and keep the property. It is filed with the court before your discharge, and you remain responsible for the debt afterward. You can cancel it within 60 days after it is filed, or before your discharge if that is later.
Redeem the Property
Keep certain personal property, such as a car or furniture, by paying the lender a lump sum equal to what the property is worth today rather than the full loan balance. The rest of the balance is discharged.
Surrender the Property
Give the property back to the lender. Any remaining balance is discharged, so you owe nothing more. This is often the best choice when you can’t keep up the payments or owe more than the property is worth.
With a home mortgage, many people simply keep making their payments. If you are behind and want to keep your house, Chapter 13 may be a better fit.
Common Questions
How long does it stay on my credit?
A Chapter 7 can appear on your credit report for up to 10 years, but scores often begin to recover sooner because the old debts are gone.
How often can I file?
You can’t receive a Chapter 7 discharge if you received one in a case filed within the last eight years.
Do both spouses have to file?
No. One spouse can file alone, or a married couple can file one joint case. We help you decide which makes sense.
Can I lose my job for filing?
Employers can’t fire you just because you filed bankruptcy (11 U.S.C. § 525).
Have business debts? See Chapter 7 for businesses, or browse our Bankruptcy FAQs.
Call to speak with an experienced Georgia bankruptcy attorney. After hours or on weekends, please leave a message; all messages will be returned.
Coleman Legal Group, LLC’s Georgia lawyers practice in the areas of Real Estate, Divorce, Family Law, Bankruptcy, Estates, Wills, Trusts, Sports and Entertainment Law, Immigration and Business Law. We have offices conveniently located at:
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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.
