Filing Georgia bankruptcy is an option on the table for most all citizens, but bankruptcy laws and codes change every few years. Why? For one, the median income of a state is how you are considered eligible for Chapter 7 and Chapter 13 bankruptcy. This guide focuses on whether or not you are eligible for Georgia Chapter 7 bankruptcy.
The Means Test
NOLO.com, a good reference for bankruptcy laws and codes, has what’s called a “means test” for bankruptcy filers in any state. All you have to do is use their calculator to see if you’re eligible. You type in your zip code for Georgia or any other state and they ask a few more questions. You can find it at http://www.legalconsumer.com/bankruptcy/nolo/
Why does income matter when filing bankruptcy? With new bankruptcy laws, sometimes you are not eligible for Chapter 7 bankruptcy in Georgia if you make too much. If you make too much, but owe a lot and have little disposable income, you have options.
How does eligibility for Chapter 7 bankruptcy work?
In more detail, if you cannot file Chapter 7 bankruptcy you do have the option for filing under Chapter 13 bankruptcy. Say you live in Atlanta and have high credit card debt, you’re behind on your mortgage, but you have a good job and enough money to stay afloat. In this case, you might not be eligible for Chapter 7 bankruptcy but you still have Chapter 13 bankruptcy as an option.
How Chapter 7 Eligibility works
If your income for a household of your size is lower than the median income for a Georgia home, you can file for Georgia Chapter 7 bankruptcy. If your income is higher than the average for a household of your size, you likely will only have Georgia Chapter 13 bankruptcy as an option.
Say you live by yourself, have debt over $200,000, have a car and a home, and you make $100,000 a year. This sounds like you have a lot of disposable income. Basically, you make too much. In this instance, you might make too much and be forced to use Chapter 13. This isn’t always bad. There are key advantages to filing under Chapter 13, such as the opportunity to keep your Georgia home and car if you stay current on payments.
How Chapter 13 Bankruptcy eligibility works
If you make too much money for Georgia Chapter 7 bankruptcy, it may not actually be bad to file for Chapter 13 bankruptcy. These are two very different bankruptcy options. For one, with Chapter 13 bankruptcy you have more of a chance to keep assets such as your home and car. If you are behind on mortgage payments for your Georgia home, you can get extra time to catch up after filing Chapter 13 bankruptcy.
Ask a Professional If You’re Eligible for Georgia Chapter 7 Bankruptcy
In any case, ask a professional bankruptcy lawyer if you’re eligible. Over the next decade, bankruptcy law may change even more. If you are unsure of things such as disposable income, and the advantages of Chapter 7 and Chapter 13, a good Georgia bankruptcy lawyer can help.
