Georgia Bankruptcy Information
- By filing for Chapter 7 bankruptcy, debtors can discharge unsecured debts, such as credit card debt and medical bills. A debtor must qualify for Chapter 7 bankruptcy by passing a means test, which compares the debtor’s family income with the median family income for a family of the same size. As of 2010, the Census Bureau lists Georgia’s median income as: single-earner, $40,546; two-person family, $55,061; three-person family, $60,887; and four-person family, $68,258.
- If the debtor’s median income is lower than the state median income, the debtor has passed the means test and can file Chapter 7. If the debtor’s median income is above the state median, the debtor passes the means test if: his disposable income is less than $100; or his disposable income is more than $100, but that amount would not be enough to pay at least 25 percent of his unsecured debt over the next 60 months in monthly installments. Monthly disposable income is determined by subtracting allowed monthly expenses from his monthly income.
- If the debtor’s disposable income is more than $100 and is sufficient to pay 25 percent of his unsecured debts over the next 60 months, then the debtor must file for Chapter 13 bankruptcy. In a Chapter 13 case, the debtor sets up a repayment plan to pay off his creditors over the next five years.
- If the debtor qualifies for Chapter 7 bankruptcy, a trustee will be appointed to his case after the petition has been filed. The trustee will gather the debtor’s property and sell all property that is not exempt. The purpose of selling the property is to pay a portion of the debtor’s unsecured creditors. After the creditors have been paid, the debtor receives a discharge of his debts.
- Georgia has a list of property that cannot be sold to pay creditors. This list includes: a homestead up to $10,000 ($20,000 if married); a motor vehicle up to $3,500; clothing; household goods; crops up to $5,000; health aids; lost future earnings up to $7,500; personal injury recoveries up to $10,000; a burial plot in lieu of a homestead; wages; pensions; alimony and child support; public benefits; insurance; and tools of the trade.