Preheat the oven to 350°F (175°C).
In a large skillet over medium heat, cook the sausage until browned and crumbly, about 5-7 minutes.
Add the diced bell pepper and chopped onion to the skillet with the sausage and sauté until softened, about 3-4 minutes.
In a large mixing bowl, whisk together the eggs, milk, garlic powder, salt, and pepper until fully combined.
In a greased 9x13 inch baking dish, layer the cubed bread, followed by the cooked sausage and vegetable mixture.
Pour the egg mixture evenly over the layered ingredients, pressing down slightly to help the bread absorb the liquid.
Sprinkle the shredded cheddar cheese on top of the casserole mixture, distributing it to cover the surface evenly.
Cover the dish with aluminum foil and bake in the preheated oven for 30 minutes.
Remove the foil and bake for an additional 10-15 minutes, or until the cheese is bubbly and golden brown.
Let the casserole rest for 10 minutes before slicing and serving.