Personal Bankruptcy & Social Security in Georgia
- Before you can file for bankruptcy in Georgia, you must take the means test. The means test determines whether you can file for Chapter 7 bankruptcy and determines the length of a Chapter 13 debt repayment plan. You use your income to conduct the means test. The means test doesn't require that you include your Social Security income into the calculations. In fact, you should exclude your Social Security income when taking the means test.
- The means test determines whether you can file for Chapter 7 bankruptcy and have your debts discharged without paying them or whether you file for Chapter 13 bankruptcy and repay most of your debts. If you qualify to receive Social Security benefits, chances are that you need that income to provide for your livelihood. Chapter 7 bankruptcy allows you to keep most of your property, while the bankruptcy court relieves you of your obligation to pay your debts. Because you receive Social Security income, which isn't counted in the means test, you more easily qualify to file for Chapter 7 bankruptcy.
- Begin the means test by comparing your family income to the median family income for a family of your family's size in Georgia. At the time of publication, the Census Bureau listed Georgia's median family incomes as: $39,384 for a single earner; $52,024 for a family of two; $56,682 for a family of three; and $69,239 for a family of four. If your family income falls below Georgia's median family income, you can file for Chapter 7 bankruptcy.
- The following example demonstrates how the exclusion of Social Security income from the means test could qualify you for Chapter 7 bankruptcy. Your family income is $40,000 as a single earner, and with that amount of income, you don't pass the comparison test. If you bring in $500 per month in Social Security income, your family income would be reduced by $6,000 per year. Thus, you would compare your family income of $34,000 to Georgia's median family income and qualify for Chapter 7 bankruptcy.