For Georgia residents weighing Chapter 7 vs. Chapter 13 bankruptcy, the choice comes down to three questions: does your income let you qualify for Chapter 7, do Georgia’s exemptions protect what you own, and do you need to stop a foreclosure or catch up on a mortgage? Chapter 7 erases most unsecured debt in about four months by liquidating any property that isn’t exempt. Chapter 13 lets you keep everything and repay creditors over three to five years under a court-approved plan. Both stop collection activity the day you file.
A Quick Way to Decide
Chapter 7 is usually the better option if your income is at or below Georgia’s median, your debts are mostly unsecured (credit cards, medical bills, personal loans), and your property fits inside the state exemptions. You walk away debt-free in roughly four months.
Chapter 13 is the better fit if any of these describe you:
- You’re behind on a mortgage and want to keep the house. Chapter 7 can’t cure mortgage arrears; Chapter 13 can.
- Your income is too high to pass the means test.
- You own non-exempt property (home equity above the Georgia cap, a paid-off second vehicle, valuable collectibles) you don’t want to lose.
- You have priority debts like recent taxes that must be paid in full and need time to do it.
Everything below fills in these points.
Do You Qualify for Chapter 7? The Georgia Means Test
Chapter 7 is only available if you pass the means test, which compares your household’s gross annual income against Georgia’s median for the same household size. As of November 2025, the figures Georgia courts use are:
- One earner: $66,722
- Two people: $82,787
- Three people: $98,877
- Four people: $120,315, plus $11,100 for each additional person
These come from U.S. Census data and update periodically, so confirm the version in effect on your filing date.1U.S. Department of Justice. Census Bureau Median Family Income By Family Size If you’re below the applicable median, you generally qualify without further analysis.
Above the median, the test moves to a second step that deducts allowed expenses using IRS-published standards for housing, transportation, and food rather than your actual spending. Multiply the leftover disposable income by 60. If it comes in under $10,275, no presumption of abuse arises and you can still file Chapter 7. If it exceeds $17,150, the law presumes you can repay creditors and pushes you to Chapter 13. Between those two numbers, the outcome depends on the size of your unsecured debt.2Office of the Law Revision Counsel. 11 USC 707 – Dismissal of Case or Conversion to Chapter Under This Title
Failing the means test doesn’t close the door on bankruptcy. It just means Chapter 13 is your path.
What You Keep: Georgia’s Exemptions
Georgia has opted out of the federal exemption scheme, so filers must use the state exemptions in O.C.G.A. ยง 44-13-100.3United States Bankruptcy Court. What Are Exemptions – Northern District of Georgia These dollar caps shape both chapters: in Chapter 7, anything above the exemption can be sold by the trustee; in Chapter 13, the non-exempt value sets the floor for what unsecured creditors must receive through your plan.
- Homestead: up to $21,500 in equity in your primary residence, or $43,000 if only one of two married spouses holds title and files.4Justia. Georgia Code 44-13-100 – Exemptions for Purposes of Bankruptcy and Intestate Insolvent Estates
- Motor vehicles: up to $5,000 in equity across all vehicles.
- Household goods: up to $300 per item for furniture, appliances, and clothing, capped at $5,000 total.
- Wildcard: up to $1,200 in any property, plus any unused homestead exemption up to $10,000. Useful for cash, a tax refund, or anything that doesn’t fit elsewhere.
Georgia’s homestead cap is modest. If your home equity exceeds it, Chapter 7 will likely cost you the house. Chapter 13 is often the answer in that situation because it lets you keep the home and repay the non-exempt equity over the plan period instead of surrendering the property to a trustee sale.
Retirement savings get stronger treatment. Funds in ERISA-qualified plans like 401(k)s and employer pensions are fully exempt with no dollar cap. Traditional and Roth IRAs are protected up to $1,711,975 as of April 2025.5Office of the Law Revision Counsel. 11 USC 522 – Exemptions Social Security benefits are entirely shielded by a separate federal statute that state law cannot override.6Office of the Law Revision Counsel. 42 USC 407 – Assignment of Benefits Keep Social Security deposits in a separate account so the funds stay traceable.
When Chapter 13 Is Worth the Longer Commitment
The clearest reason Georgia filers pick Chapter 13 over Chapter 7 is to save a home. If you’re behind on mortgage payments, Chapter 13 lets you cure the arrears over the plan while making current payments to the lender. Chapter 7 has no mechanism to do this. The automatic stay stops the foreclosure the moment you file, and as long as you keep up with plan payments, the lender cannot resume foreclosure based on the arrears you’re curing.7Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay
Chapter 13 also handles priority debts that Chapter 7 doesn’t erase. Recent income taxes, past-due child support, and similar obligations can be paid in full through the plan on a manageable schedule rather than demanded in a lump sum.
What the Plan Looks Like
Your plan runs three years if your income is below Georgia’s median, and five years if it’s above.8United States Courts. Chapter 13 – Bankruptcy Basics The monthly payment is based on your disposable income after allowed expenses and must pass the “best interest of creditors” test: unsecured creditors have to receive at least what they would have gotten if your non-exempt property had been liquidated in a Chapter 7.9Office of the Law Revision Counsel. 11 USC 1325 – Confirmation of Plan
A standing trustee administers the plan and can charge up to 10 percent of your payments for that service. The fee is built into your monthly payment, so factor it in when you estimate what the plan will actually cost. When you finish all payments, remaining eligible unsecured debts are discharged.
Life rarely cooperates with a five-year schedule. If your income drops or expenses spike, you can ask the court to modify the plan, raising or lowering payments, extending or shortening the term, or adjusting what individual creditors receive.10Office of the Law Revision Counsel. 11 USC 1329 – Modification of Plan After Confirmation The modified plan still cannot stretch beyond five years from the original first payment date. If no workable modification is possible, you can convert to Chapter 7 or seek a hardship discharge.
How Chapter 7 Actually Plays Out in Georgia
Chapter 7 is a liquidation. A court-appointed trustee reviews what you own, identifies anything outside the exemptions, sells it, and distributes the proceeds to creditors in priority order. The court then discharges most remaining unsecured debts. A typical case closes about four months after filing.11United States Courts. Discharge in Bankruptcy – Bankruptcy Basics
Most Chapter 7 cases in Georgia are “no-asset” cases, meaning everything fits inside the exemptions and the trustee has nothing to sell. If you want to keep a financed car after discharge, you’ll usually need a reaffirmation agreement with the lender, filed with the court within 60 days of the first meeting of creditors. Signing one is voluntary. The trade-off: if you default later, the lender can repossess and still come after you for any deficiency, exactly as if you’d never filed.
Debts Neither Chapter Erases
Both chapters leave certain debts intact. If most of what you owe falls in these categories, bankruptcy may not solve your problem.12Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
- Child support and alimony are never dischargeable.
- Recent income taxes generally survive. To discharge older federal income tax debt, the return must have been due more than three years before filing, actually filed more than two years before filing, and assessed at least 240 days before filing.
- Student loans survive unless you prove “undue hardship” in a separate adversary proceeding, which most courts evaluate under the Brunner test.
- Debts obtained by fraud, false pretenses, or a materially false written financial statement are not dischargeable.
- Consumer debts over $900 for luxury goods incurred within 90 days of filing, and cash advances over $1,250 taken within 70 days of filing, are presumed non-dischargeable.
- Debts for death or personal injury caused by driving while intoxicated survive.
- Debts from willful and malicious injury to a person or property survive.
- Criminal fines and most government penalties survive.
The automatic stay also has limits. Child support, alimony, paternity, custody, and domestic violence proceedings continue regardless of a bankruptcy filing, and collection of domestic support from property outside the bankruptcy estate continues as well.13Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay
Credit Reporting, Converting, and Filing Again
Chapter 7 stays on your credit report for 10 years from the filing date. Chapter 13 drops off after seven. That shorter window is one reason some filers who could qualify for Chapter 7 still consider Chapter 13, though the three-to-five-year payment commitment is a real trade-off.
You can switch chapters mid-case. A Chapter 13 debtor has an absolute right to convert to Chapter 7 at any time, with no court approval needed.14Office of the Law Revision Counsel. 11 USC 1307 – Conversion or Dismissal A Chapter 7 debtor can request conversion to Chapter 13 if eligible and the case hasn’t already been converted from another chapter. No additional filing fee applies when converting from Chapter 7 to Chapter 13.15United States Courts. Chapter 7 – Bankruptcy Basics
If you’ve filed before, federal law limits how soon you can receive another discharge. Waiting periods run filing date to filing date:
- Chapter 7 after Chapter 7: eight years.16Office of the Law Revision Counsel. 11 USC 727 – Discharge
- Chapter 7 after Chapter 13: six years, unless the earlier plan paid 100 percent of unsecured claims or at least 70 percent in a good-faith best-effort plan.
- Chapter 13 after Chapter 7: four years.
- Chapter 13 after Chapter 13: two years.
You can still open a case before the waiting period runs, but the court will deny the discharge.
Filing Costs and What You Have to Do First
The Chapter 7 filing fee is $338 ($245 case fee, $78 administrative fee, $15 trustee surcharge). Chapter 13 costs $313 ($235 case fee plus the $78 administrative fee). You can request an installment plan if you can’t pay upfront. Chapter 7 filers whose household income is below 150 percent of the federal poverty guidelines can apply for a complete fee waiver.17United States Bankruptcy Court. Filing Fees for Chapter 7 and Chapter 13
Before filing, you have to complete a credit counseling course from an agency approved by the U.S. Trustee for Georgia and file the certificate with your petition.18U.S. Department of Justice. Credit Counseling Agencies – Georgia You’ll also need pay stubs or other payment records from the 60 days before filing,19Office of the Law Revision Counsel. 11 USC 521 – Debtor’s Duties along with federal and state tax returns for the prior four years.20Internal Revenue Service. Declaring Bankruptcy After filing, the trustee schedules a 341 meeting of creditors, usually 21 to 40 days out, where you answer questions under oath about your petition.21U.S. Department of Justice. Section 341 Meeting of Creditors
If you’re still unsure which chapter fits, work the three questions in order: Does your income pass the means test? Do Georgia’s exemptions cover what you own? Do you need to save a home or pay a priority debt over time? The answers almost always point to one chapter.