Our clients often have many questions for us when we meet for our free consultation. Our goal is to ensure our clients have all of their questions answers and understand the bankruptcy process from start to finish. It is important to us that our clients understand the benefits of bankruptcy and how filing will affect them. And because of the prevalence of bankruptcy myths and misinformation, we appreciate the opportunity to dispel those harmful myths!

To help you better understand how filing for bankruptcy protection can help you, we’re here to answer the 3 bankruptcy questions most people ask.

  1. Do I qualify for bankruptcy?

There is a prevalent myth that people who have high income cannot file for Chapter 7 bankruptcy. This is simply not true.

If your income, adjusted for household size is above the median income for your state, then you must run the means test to determine whether or not you qualify for Chapter 7 bankruptcy. Having a high income does not mean you cannot qualify for bankruptcy, it simply means that you have to run the means test to show that you qualify. The means test is a review of your income minus expenses. Learn more about the means test here.

As of April 1, 2017 the median household income in Georgia is:

  • Household of One: $43,274
  • Household of Two: $56,301
  • Household of Three: $62,483
  • Household of Four: $73,202
  • Households of more than four: add $8,400 for each individual in excess of four.

Certainly the means test makes qualifying for Chapter 7 bankruptcy more difficult; however, many people who file for Chapter 7 bankruptcy earn above the median income. An experienced bankruptcy attorney can help you navigate the means test and qualify for the debt relief you deserve.

  1. Will I lose all of my belongings if I file for bankruptcy?

No, in general most people are able to keep all of most of their belongings through bankruptcy.

Bankruptcy law provides for you to keep property, assets, and other belongings valued up to a certain dollar amount through exemptions. Property that is protected in bankruptcy is known as “exempt property.” You get to keep exempt property if its value does not exceed a certain dollar amount.

Georgia law allows for exemption amounts for your house, automobile(s), household goods, retirement accounts, and many other belongings. To see the full list of Georgia exemptions, click here.

  1. How long will my credit be ruined?

Filing for bankruptcy will decrease your credit score; however, many of our clients are surprised to learn how quickly their credit score can begin to recover after bankruptcy.

Here’s one of the reasons: Prior to filing for bankruptcy their credit score was taking a hit each month from missed payments, late payments, and increasing debt loads. After successfully filing for bankruptcy, they have little to no debt, making their debt to income ratio favorable. Which makes them a viable candidate for a loan or line of credit.

As for your credit report: A Chapter 7 bankruptcy will report on your credit report for 10-years after the date your case is filed; a Chapter 13 bankruptcy will report on your credit report for 7-years after the date your case is filed.

To be certain, filing for bankruptcy may temporarily limit access to credit, or cause you to pay higher interest rates for the credit you obtain. Though many of our clients find that the relief of getting out of debt outweighs this concern.

Follow us on Facebook for answer to your bankruptcy questions and for tips on getting out of debt!

When you work with us, we will answer all of your questions and ensure that you are informed about the details of your bankruptcy case. Call us today (912) 351-9000 to schedule your free consultation.

The Law Office of Barbara B. Braziel proudly serves all of Savannah, GA and the surrounding counties including Chatham County, Effingham County, Bulloch County, Bryan County, Liberty County, Long County.

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.