To qualify for Chapter 13 bankruptcy in Georgia, you must have a regular source of income sufficient to cover both your living expenses and the repayment plan. There are also debt limits: your unsecured debts cannot exceed $465,275, and your secured debts cannot exceed $1,395,875 (as of 2024). This chapter is ideal for individuals who earn enough to repay their debts over time but are seeking protection from foreclosure and other creditor actions. You will also need to complete credit counseling before filing.

If you’re struggling with overwhelming debt in Georgia, Chapter 13 bankruptcy may be a viable solution to help you regain control over your financial affairs. This process is designed for individuals who have a steady income but are burdened by debt they can’t manage on their own. Chapter 13 provides an opportunity to repay a portion or all of your debts over time while protecting your assets from liquidation.

As such, it’s important to explore the income and debt qualifications for Chapter 13 bankruptcy in Georgia. An experienced bankruptcy attorney can detail everything you need to know before filing, but a review of the qualifications is essential for determining bankruptcy options.

 

How to Qualify for a Chapter 13 Bankruptcy in Georgia

To qualify for Chapter 13 bankruptcy filing in Georgia, you must meet specific criteria regarding your gross income and debt levels. The first requirement is that you must have a regular and stable source of income. This is crucial since Chapter 13 involves a repayment plan over three to five years, and you need enough income to cover your living expenses while making the required payments.

Income Requirements

There is no specific minimum or maximum income limit to file for Chapter 13. Instead, your income must be sufficient to cover your monthly living expenses and your proposed repayment plan. This plan will be based on your disposable income, which is the amount left over after paying for necessary expenses such as housing, utilities, and food. The court will review your income to verify that you can realistically meet the terms of the repayment plan to pay creditors.

Debt Limits

Chapter 13 also has debt limits that must be met. As of 2024, unsecured debts (such as credit card bills and medical expenses) must not exceed $465,275, while secured debts (such as mortgages or car loans) must not exceed $1,395,875. These limits are adjusted periodically, so it’s important to check with a bankruptcy attorney in Georgia for the most current figures.

 

 

Disqualifications for Chapter 13 Bankruptcy

Not everyone can file for Chapter 13 bankruptcy, even if they meet the income and debt qualifications. Several disqualifications can prevent you from being eligible to file.

Prior Bankruptcy Cases

If you have filed for Chapter 7 or Chapter 13 bankruptcy in the past, there are time limits before you can file again. Specifically, if you received a discharge in a previous Chapter 13 case within the last two years or in a Chapter 7 case within the last four years, you are not eligible to file for Chapter 13 bankruptcy again immediately. These limits are in place to prevent abuse of the bankruptcy system.

Non-Compliance with Bankruptcy Court Orders

Another disqualification arises if you failed to comply with court orders in a prior bankruptcy case or if your previous case was dismissed because you didn’t follow court procedures or payment terms. If the court sees that you are not acting in good faith, they may deny your Chapter 13 petition.

Insufficient Income Resources or Inability to Complete Repayment Plan

If the court determines that you do not have enough disposable income to meet the terms of a Chapter 13 repayment plan, your petition may be denied. It’s essential to be realistic about your financial situation and work with a bankruptcy attorney in Georgia to develop a feasible repayment plan.

Failure to Complete Credit Counseling

Bankruptcy laws require all filers to complete a credit counseling course before filing a Chapter 7 or Chapter 13 petition. The goals are:

• To assess whether bankruptcy is a suitable remedy as opposed to other debt relief options
• To determine eligibility for Chapter 7 or Chapter 13
• To put you on the right track with financial responsibility

This counseling is intended to help you evaluate your options and determine whether bankruptcy is the right solution. You must complete the required credit counseling course within 180 days before filing your petition. If you fail to meet this requirement, your petition may be dismissed.

 

Other Information Needed to File a Chapter 13 Petition in Georgia

Before filing for Chapter 13 bankruptcy in Georgia, you will need to gather several key documents and information. These documents are necessary to complete the bankruptcy petition and to develop your repayment plan.

Required Documents

To file, you will need to provide the court with detailed financial information, including:

• A list of all your creditors and the amounts owed for secured and unsecured debt
• Documentation of your income (such as pay stubs or tax returns)
• A list of your expenses, including essential living expenses
• A list of any assets and property you own
• Information on any contracts or leases you are involved in

This documentation will be reviewed by the court to confirm that your repayment plan is fair and feasible. Providing complete and accurate information is critical for a smooth bankruptcy process.

Credit Counseling Requirement

In addition to providing financial documentation, you must complete credit counseling from an approved credit counseling agency within 180 days before filing. The certification documents you receive upon completion act as proof that you met this requirement.

 

Fees to File a Chapter 13 Bankruptcy Petition

Filing for Chapter 13 bankruptcy involves certain fees, which vary slightly depending on where you are filing in Georgia. These fees include court costs and attorney fees, and they can add up to a significant expense.

Court Filing Fees

As of 2024, the standard court filing fee for Chapter 13 bankruptcy in Georgia is $313. This fee covers the cost of submitting your petition to the bankruptcy court. If you are unable to pay the full fee upfront, some courts allow you to pay in installments over time.

Attorney Fees

In addition to court fees, you will need to pay an attorney to help guide you through the bankruptcy process. Attorney fees for Chapter 13 cases in Georgia typically range from $3,000 to $5,000, though some attorneys may offer payment plans. Hiring an experienced bankruptcy attorney is strongly recommended for your case and protection of your rights.

 

What Happens Once Chapter 13 is Filed in Georgia?

Once your Chapter 13 bankruptcy petition is filed in Georgia, several things happen. The court will issue an automatic stay, which prevents creditors from attempting to collect on your debts. This includes stopping wage garnishments, foreclosure proceedings, and other collection efforts.

The Repayment Plan

One of the most important aspects of Chapter 13 bankruptcy is the repayment plan. This plan is based on your disposable income and is typically structured over three to five years. During this time, you will make regular payments to the bankruptcy trustee, who will distribute the funds to your creditors according to the terms of the plan.

Court Involvement

Once you file your petition, you will need to attend a meeting of creditors, also known as a 341 meeting. During this meeting, you will answer questions about your financial situation under oath. A judge will then review your repayment plan to confirm it complies with bankruptcy law.

 

 

How Does Filing for Bankruptcy Affect Your Credit?

Filing for bankruptcy, whether it’s Chapter 7 or Chapter 13, will have a significant impact on your credit score. However, the effects and recovery times vary depending on which chapter you file.

Credit Impact of Chapter 7

Chapter 7 bankruptcy remains on your credit report for 10 years from the filing date. This type of bankruptcy is quicker and results in the discharge of most unsecured debts, but it also has a more prolonged negative impact on your credit.

Credit Impact of Chapter 13

Chapter 13 bankruptcy remains on your credit report for seven years. Since Chapter 13 involves a repayment plan, creditors may view it more favorably than Chapter 7. You may also have the opportunity to rebuild your credit more quickly after completing your Chapter 13 repayment plan.

 

Getting Debt Discharged Through Chapter 7

While Chapter 13 is ideal for those with a stable income, there are cases where Chapter 7 may be a better fit. Chapter 7 allows for the discharge of most debts, including credit card debt and personal loans, without the need for a repayment plan. However, not everyone qualifies for Chapter 7 due to the means test, which evaluates your income level compared to the median income in Georgia.

Means Test for Chapter 7

If your income is below the state median for Georgia, you may qualify for Chapter 7 bankruptcy. This test takes into account your household size and monthly income to determine eligibility. If you earn too much, you may still be eligible for Chapter 13.

Why Chapter 13 May Be a Better Option

For those with valuable assets they wish to protect, Chapter 13 can be a better solution. Chapter 13 allows you to keep your home, car, and other assets, provided you stick to the repayment plan. It’s a powerful tool for debt relief that allows for financial restructuring without losing your most important possessions.

 

Get Legal Help Filing Bankruptcy in Georgia

Filing for Chapter 13 bankruptcy in Georgia can provide the relief you need if you’re facing overwhelming debt but have a steady income. Understanding the income and debt qualifications, as well as the overall process, is crucial to making an informed decision about your financial future.

If you’re struggling with debt and considering Chapter 13 bankruptcy in Georgia, please contact Morgan & Morgan. With an experienced bankruptcy attorney in Georgia at your side, you have guidance with exploring your options and developing a plan that works for your unique situation. You can call 706-548-7070 for a free consultations to take the first step toward financial relief.

 

FAQs About Income and Debt Qualifications for Chapter 13 Bankruptcy in GA

Can Chapter 13 bankruptcy be denied?
Yes, Chapter 13 bankruptcy can be denied if you don’t meet eligibility requirements, such as having insufficient income to complete the repayment plan or exceeding debt limits. It can also be denied for failure to submit necessary documents, complete credit counseling, or if you’ve filed multiple bankruptcies.

How does Chapter 13 work in Georgia?
Chapter 13 in Georgia allows individuals with a steady income to restructure their debts through a court-approved repayment plan. The plan lasts three to five years, during which you make monthly payments to a trustee, who then distributes the funds to creditors. The process protects assets from foreclosure.

How to file Chapter 13 with no money in Georgia?
If you cannot afford to pay the Chapter 13 filing fees upfront in Georgia, you may request to pay them in installments. Some attorneys also offer payment plans for their fees. Completing pre-bankruptcy credit counseling is mandatory, but low-cost or free options are available.

What is considered income for bankruptcies?
For Chapter 13 bankruptcies, income includes wages, salaries, bonuses, commissions, business income, Social Security benefits, disability payments, pensions, and rental income. All sources of regular income will be considered by the court to determine your ability to fund the repayment plan.

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