How to Qualify for Bankruptcy in Georgia: Eligibility Requirements
Filing for bankruptcy can be a complex process, particularly if you are unfamiliar with the legal requirements. In Georgia, as in other states, there are specific eligibility requirements that you must meet to qualify for bankruptcy protection. Understanding these criteria is crucial for determining whether bankruptcy is the right option for you.
Types of Bankruptcy in Georgia
The two most common types of bankruptcy for individuals are Chapter 7 and Chapter 13. Each has distinct eligibility requirements:
- Chapter 7 Bankruptcy: This liquidation bankruptcy allows filers to eliminate most unsecured debts, such as credit cards and medical bills. However, to qualify, you must pass the means test.
- Chapter 13 Bankruptcy: This type involves creating a repayment plan to pay off debts over three to five years. To qualify, you must have a regular income and unsecured debts below a certain threshold.
Eligibility Requirements for Chapter 7 Bankruptcy
1. Means Test: To qualify for Chapter 7, you must pass the means test, which compares your income to the median income for a household of your size in Georgia. If your income is below the median, you automatically qualify. If it is above, you will need to deduct certain allowable expenses to determine your disposable income.
2. Credit Counseling: Before filing, you must complete a credit counseling course from an approved agency. This session helps you understand your finances and explore alternatives to bankruptcy.
3. Previous Bankruptcy Filings: If you have filed for Chapter 7 bankruptcy in the last eight years, you will not be eligible to file again.
Eligibility Requirements for Chapter 13 Bankruptcy
1. Regular Income: A steady source of income is essential for Chapter 13 bankruptcy. This income can come from various sources, including wages, rental income, or self-employment.
2. Debt Limits: To qualify, your secured debts (like a mortgage and car loans) cannot exceed $1,395,000, and unsecured debts (like credit cards and personal loans) must be below $465,275. These figures may change over time, so it's wise to verify current limits.
3. Credit Counseling: Like Chapter 7, you must also complete credit counseling before filing for Chapter 13 bankruptcy.
Good Faith Filing
Regardless of which chapter you file under, you must demonstrate good faith in your bankruptcy filing. This means you need to provide accurate information about your financial situation and adhere to the bankruptcy process requirements.
Additional Considerations
1. Non-Dischargeable Debts: Certain debts, such as child support, alimony, and some tax debts, are not dischargeable in bankruptcy. It's essential to be aware of which debts will remain as you contemplate filing.
2. Exemptions: Georgia allows specific property exemptions that protect particular assets during bankruptcy. This can include your home equity, vehicle equity, and personal belongings, which help you maintain a semblance of financial stability.
3. Consult an Attorney: Given the complexities of bankruptcy law, it's often beneficial to consult with a bankruptcy attorney. They can provide personalized advice based on your unique circumstances and help ensure you meet all eligibility requirements.
Conclusion
Qualifying for bankruptcy in Georgia involves meeting specific eligibility requirements based on the type of bankruptcy you wish to file. By understanding the means test for Chapter 7 or the income requirements for Chapter 13, you can determine the best path forward for managing your financial burdens. Always consider seeking legal assistance to navigate the intricacies of the bankruptcy process effectively.