Almost every person who has consistent income qualifies for Chapter 13 bankruptcy in Georgia. Every year, I meet with hundreds of people from Calhoun, Dalton, Chatsworth, Dallas, Hiram, Rome, and Cartersville Georgia. In some rare situations, it is possible for a person with consistent income to be disqualified from filing Chapter 13 bankruptcy.
For example, if you have secured debts that exceed the statutory limit of $1,081,400.00, you cannot file Chapter 13 bankruptcy. Every few years, this amount is adjusted for inflation. Secured debts are debts that are backed up by some type of collateral. For instance, your house mortgage and your car notes are secured debts. If you don’t pay for the house, the mortgage company will foreclose on you and take back their collateral. If you don’t make your car payments, the car company will repossess your vehicle.
It is an extremely rare case where an individual has more than $1,081,400.00 in secured debt. Typically, a builder who owns a bunch of spec houses may exceed this limit. Self-employed individuals who personally guarantee the debts of a failed business may also exceed this limit.
If you have unsecured debts that exceed the statutory limit of $360,475.00, you cannot file for Chapter 13 bankruptcy. Credit cards, signature loans, deficiencies on repossessed vehicles, and medical debt are examples of unsecured debt. If you default in making payments on this type of debt, there is no property that can be seized as a consequence of default. The most recent case I have seen where a debtor almost exceeded this limit, was a case where the debtor spent a few months in a hospital. In this day and age of super high medical costs, a few months in a hospital can easily put you over the limit in some situations.
Does a person who exceeds this limits have other options? The answer is yes. People in these types of situations can file for Chapter 11. I personally do not take any Chapter 11 cases. My firm is exclusively limited to Chapter 13 and Chapter 7 bankruptcy cases.