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Income requirements for filing for Chapter 7 bankruptcy

It may seem strange but, in some cases, a person may make too much money to file for certain types of bankruptcy. That is the situation regarding Chapter 7 bankruptcy, a form of personal bankruptcy that is limited to individuals with relatively low incomes and who cannot repay their loans. This post will offer Georgia residents a review of what types of income are considered when determining if a person may pursue Chapter 7 bankruptcy and what options they may have if they do not qualify.

A person's wages and regular work income are factored into the determination of whether they may use Chapter 7 bankruptcy to overcome their debts. Also, any income from rents from the ownership of property may be applied to their income total, as can income from royalties and dividends.

If a person owns a small business in addition to their regular job, any money that they make from that business enterprise may be considered when they are seeking Chapter 7 protection. Certain benefits, including workers' compensation, Social Security, and unemployment many also be factored into a person's income when determining what path they should follow.

If a person makes too much money, then they will have to find an alternative to Chapter 7 bankruptcy. They may be able to use Chapter 13 bankruptcy instead, as this form of bankruptcy does not set a cap on how much money a debtor may earn to qualify. Readers are asked to discuss their bankruptcy questions with their attorneys to make sure they are receiving the best possible information for their particular situations.

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Balbo & Gregg, Attorneys at Law, P.C.

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