Chapter 7 Bankruptcy in Georgia

In Georgia, a Chapter 7 bankruptcy is the one that most people think of when talking about having a ‘clean slate.’  In 2005 Congress made some significant changes to the bankruptcy system in the 2005 Bankruptcy Act. This was done over the worry that many people were filing for Chapter 7 bankruptcy when they could afford to pay some or all of their debts.

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In order to ensure that the only people who filed for Chapter 7 bankruptcy were the ones that truly needed to do so, the 2005 Bankruptcy Act created a means test.

The only two ways to pass the Means Test in Georgia is by being able to show that your current monthly income, which is an average of your household income for the last 6 months, is less than the median income for Georgia based upon the size of your family.

The second way to pass the Georgia Means Test is to go through the entire calculation which looks at your income and reasonable monthly expenses. If, after the calculation, there is little or no disposable income, then you can file a Georgia Chapter 7 bankruptcy.

What Are the Georgia Median Income Levels?

Keep in mind that the numbers below are for cases filed on or after May 1, 2019.

The Georgia median income levels are as follows:

Household Size               Monthly Income                   Annual Income

1                                           $4,103.00                                $49,236.00

2                                          $5,320.83                                $63,850.00

3                                          $6,035.50                                $72,426.00

4                                          $7,146.92                                 $85,763.00

5                                          $7,896.92                                 $94,763.00

6                                          $8,646.92                                 $103,763.00

7                                          $9,396.92                                  $112,763.00

8                                          $10,146.92                                 $121,763.00

9                                          $10,896.92                                 $130,763.00

10                                         $11,646.92                                  $139,763.00                                 

Are There Georgia Means Tests Exemptions?

If your debts are not mostly comprised of consumer debts, then you will be exempt from the means test.  You are also exempt from the Georgia Means Test if you are a disabled veteran and most of your debt was incurred during active duty or performing homeland security defense activities.

What if My Income Is Higher Than The Georgia Median?

If you find that your income is higher than the Georgia median income levels for the number of people in your household, you will need to complete the entire Georgia Means Test in order to determine if you can pay back a portion of your unsecured debts in a Chapter 13 bankruptcy.

What Information Do I Need to Complete the Georgia Means Test?

You must have your current monthly income.  Income includes all of your sources of income such as business income, rental income, interest and dividends, pensions, retirement plans, and amounts that are paid to you by others for household expenses, and unemployment income.

Once you have this information, you need to subtract all of your expenses allowed under Georgia law from your income in order to determine the correct amount of income under bankruptcy law that you have available to pay your unsecured creditors in a Chapter 13 plan.

It’s important to note that just because you qualify to file a Georgia Chapter 7 bankruptcy doesn’t mean you should. In general, a Georgia Chapter 7 bankruptcy may be a better option if you are not planning on keeping a secured property, like your home with a mortgage.  However, you should consult with a Georgia bankruptcy lawyer to determine what all your options are and the best course of action for your individual circumstances. 

If you’re not sure whether a Georgia Chapter 7 bankruptcy is the best course of action for you and your family or are concerned about keeping your home, motor vehicles, or other assets, call Georgia bankruptcy lawyer Tyler Moffitt to schedule a consultation and discuss the various options that may be available to you. 

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