INFORMATION ABOUT CHAPTER 7 BANKRUPTCY ELIGIBILITY IN GEORGIA
The bankruptcy lawyers at Perrotta & Cahn have helped many individual debtors obtain a fresh start with Chapter 7 bankruptcy. Here, we provide some basic information about who qualifies for Chapter 7, but please keep in mind that every case is unique and should be looked at individually. Come to one of our offices in Cartersville, Calhoun, Dalton or Dallas to learn more about Chapter 7 eligibility.
How Chapter 7 Works
In a Chapter 7 bankruptcy, a bankruptcy trustee gathers and sells a debtor’s assets to pay creditors in accordance with the provisions of the U.S. Bankruptcy Code. The debtor is allowed to keep certain “exempt” property, such as a vehicle, household items and insurance policies up to a certain amount, but the trustee will liquidate the debtor’s remaining assets. In exchange for this liquidation, Chapter 7 discharges (wipes out) most unsecured debt, such as credit card bills, medical bills, and loans not backed by collateral. For more information, please see our Chapter 7 bankruptcy page.
Who is Eligible for Chapter 7?
Anyone, including individuals and business entities, may file a Chapter 7 bankruptcy petition, but certain income guidelines used by the bankruptcy trustee determine whether a debtor qualifies for Chapter 7 bankruptcy. For individuals, the “means test” compares your income to Georgia’s median income, and is meant to determine whether you are truly bankrupt or whether you have expendable income to make minimal payments to your creditors.
If your income is lower than Georgia’s median income, you can likely file for Chapter 7 bankruptcy. However, if your monthly income is more than Georgia’s median income, the means test is used to determine whether the Chapter 7 filing is presumptively abusive. Abuse is presumed if the debtor’s aggregate current monthly income over five years is more than $11,725 or 25% of the debtor’s non-priority unsecured debt, as long as that amount is at least $7,025. Unless the debtor overcomes the presumption of abuse, the case will generally be converted to a Chapter 13 or will be dismissed.
Whatever your income may be, if you are facing mounting bills and financial difficulties, it is important to consult with an experienced bankruptcy lawyer who can assess your situation and discuss all of your options for debt relief.
Contact an Experienced Bankruptcy Lawyer to Discuss Chapter 7 Eligibility
If you are considering bankruptcy and wish to discuss your eligibility and options under Chapter 7, please contact Perrotta & Cahn for a free initial consultation. Our firm has been practicing bankruptcy law in northwest Georgia longer than anyone else in the area.