When it comes to taking an honest and clear look at one’s financial situation, a Georgia resident may be overwhelmed by the amount of debt that they carry. Debt lives in numerous parts of a person’s life, from the credit cards that they fight to pay off to the student loans that they make monthly payments on but never seem to get any smaller. Mortgage debt, medical debt and private debts are other types of obligations that many Americans struggle to tackle each and every day.
Though not all choose to follow such a path, some debtors use personal bankruptcy to take control of their finances. There are two main forms of bankruptcy that individual debtors use to alleviate their burdens — Chapter 7 bankruptcy and Chapter 13 bankruptcy — and each has its own set of requirements that must be met to complete the process. What readers may not know is that their income levels may actually force them to file for one form of bankruptcy instead of the other.
To file for Chapter 7 bankruptcy a debtor generally must not make more than the median income for their state. Therefore, a Richmond Hill resident might be precluded from using Chapter 7 bankruptcy if they made more money that the median of Georgia residents.
However, the Chapter 7 means test allows has a second part for some whose incomes exceed this threshold that would allow them to file for Chapter 7 bankruptcy protection, though for those with adequate incomes Chapter 13 bankruptcy may be a good choice for eliminating their debts. Speaking with a bankruptcy attorney before beginning the filing process is a good first step for those who are burdened by their overwhelming debts.