In a Georgia Chapter 7 bankruptcy, a filer’s assets are sold by the bankruptcy trustee who will then use the proceeds to pay down the filer’s creditors. One of the most important aspects of Chapter 7 bankruptcy is that once the sale is complete, the filer’s remaining debts are discharged. For those with few assets, a Chapter 7 bankruptcy may be the best choice, if they can pass the means test.

The means test is used to determine who qualifies for a Chapter 7 bankruptcy. If a filer makes too much money, they will not pass the means test because it is assumed that they can afford to pay back their debts over a period of time. In such cases, the filer may be limited to filing a Chapter 13 bankruptcy.

The means test is only concerned with higher income earners. If a filer’s currently monthly household income is less than the Georgia median income for a household of their size there is a presumption that they pass the means test and are eligible to file a Chapter 7 bankruptcy. As of 2019, the figures are:

  • One-person household – $47,953, or $3996 monthly
  • Two-person household – $63,303, or $5,275 monthly
  • Three-person household – $72,594, or $6,049 monthly
  • Four-person household – $82,476, or $6,873 monthly
  • Five-person household – $91,476, or $7,623 monthly

If a filer’s income is greater than this amount, they must complete and pass the means test before qualifying for a Chapter 7 bankruptcy. Filers must use Form 122A-2, which requires they deduct certain qualifying expenses from their monthly income to determine if they have sufficient disposable income to make payments on their debt. If so, then the filer cannot pursue a Chapter 7 bankruptcy and instead must file a Chapter 13 bankruptcy.

If you are unsure whether you qualify for a Chapter 7 bankruptcy, or need assistance weighing your options, contact an experienced bankruptcy lawyer.

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