If you are a high-income earner in Georgia or Tennessee facing financial hardship, you may feel like you have no options, but it’s not true. Many high-income earners face financial hardship, more than ever following the pandemic. If you are struggling to meet your financial responsibilities, you may qualify for Chapter 7 bankruptcy.
What Does Chapter 7 Bankruptcy Include?
When filing Chapter 7 bankruptcy in Georgia or Tennessee, you can expect to discharge most unsecured debts. Discharging an unsecured debt means you are no longer liable for repaying the creditor. Various “debts” fall into the unsecured debt category, including:
- Personal loans
- Credit card balances
- Lawsuit judgments
- Medical bills
Other types of debts may not be dischargeable in bankruptcy. A few examples of nondischargeable debt include:
- Alimony payments
- Student loans
- Child support
While filing Chapter 7 bankruptcy does not guarantee that all your unsecured debts will be discharged, it has the potential to offer a massive amount of relief. However, as a higher-income earner, you could have difficulty qualifying to file.
How to Qualify to File Chapter 7 Bankruptcy:
To qualify to file for Chapter 7 bankruptcy, you must pass the means test. The means test calculates your average income (using the past six months). The average income must be lower than the state’s median income for a matching household size to qualify to file Chapter 7. High-income earners may exceed the average income, but expenses are also considered. Deducting expenses can demonstrate that there is insufficient disposable income to repay your creditors. Allowable deductions include healthcare, mortgages, taxes, childcare, car payments, nonexempt property, mandatory retirement contributions, charitable contributions, and education costs for dependents.
Qualifying for Chapter 7 Bankruptcy Based on No Discretionary Income:
High-income earners in Tennessee and Georgia may find that they qualify for Chapter 7 bankruptcy once their expenses are taken into consideration alongside their income. If you seek to qualify for Chapter 7 bankruptcy as a high-income earner, avoid purchasing any luxury items or unnecessary services to demonstrate to the court that you are filing bankruptcy in good faith.
We understand that financial struggle is complex, and we want to help. If you have questions about bankruptcy and how filing bankruptcy could help your family, please don’t hesitate to contact Ken Rannick. You are in good hands with Kenneth C. Rannick P.C.