In order to file a Chapter 7 bankruptcy, you must pass a
means test which compares your disposable income to the average median income
for a family of the same size in Georgia.
What is a Means Test?
A Chapter 7 bankruptcy is a short process, typically lasting
no longer than six months. The Chapter 7 means test is a method of
qualification designed to reserve Chapter 7 bankruptcies only for those who
truly can't afford to repay their debts in full. Your bankruptcy attorney will
walk you through the process to ensure things go smoothly.
Taking a Means Test
To begin a means test, compare your annual income to the
median income for the same size household in Georgia. If you make less than
your state’s median income, you qualify and are free to file a Chapter 7
bankruptcy (presuming all other eligibility requirements are met). If you make
the same, or more than, the median income for Georgia, then you must continue
on with the test. In part two of the bankruptcy means test in Georgia, you use your monthly income
for the six months before you plan on filing bankruptcy. By deducting your
monthly expenses from your current average monthly income, you calculate your
disposable income. The lower your disposable income each month, the more likely
you may qualify for Chapter 7. The Means Test can be very very complicated. Your
bankruptcy attorney will help you accurately prepare your Means Test.
What Happens If You Don't Qualify for Chapter 7 Bankruptcy
If you don’t qualify for a Chapter 7, you can file a Chapter 13 bankruptcy instead. A Chapter 13 is known as a repayment bankruptcy and can
help you repay your debts over either a three-to-five year period.
If you're thinking about filing bankruptcy, but aren't sure
if you should move forward, call King & King at 404-524-6400 to schedule a
free consultation with an attorney. King & King is dedicated to helping
clients file for personal bankruptcy and rebuild their lives afterwards.
