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Benefit from the Experience of Attorneys Bill and Valerie Sherman Former Assistant Attorney General, Assistant County Attorneys and Magistrate Judge

Does Income Matter When I File For Bankruptcy?

Question: Does it really matter how much money I make if I want to file for bankruptcy in Georgia?

Answer: Yes, it does matter.

Federal law provides that a person’s income is an important component in their ability to file bankruptcy and in what type of bankruptcy they can file, i.e. a chapter 7 or a chapter 13 Income will also be an important consideration in the amount of the monthly payment for a chapter 13 There are numerous variables and issues in bankruptcy and income is certainly not the only consideration, but it is an important one.

Income can be derived from various sources. For most people income is from a job: part-time or full-time. But income can also be generated be stocks, bonds, mutual funds, pensions, annuities, IRA's, 401(K)'s and other types of financial instruments. Some popular stocks include: Wal-Mart Stores, Apple, Exxon Mobil, General Electric, WarrenBuffett’s Berkshire Hathaway, Bank of America and Microsoft. Some of the largest stock brokerages are TD Ameritrade, Charles Schwab, Scottrade, Fidelity and E*Trade And some prominent mutual fund companies are Vanguard, American Funds, Fidelity, JP Morgan, and Dodge & Cox.

As for pensions, residents of the state of Georgia can be part of many plans, including the Teachers Retirement System and the Employees’ Retirement System, as well as pension plans for firefighters and employees of companies like Ford and UPS. The states of California, New York and Illinois have some of the largest pension plans in the country. Sadly, it has been predicted with increasing frequency that many pension plans will fail and leave retirees with nothing, as has happened many times with private companies.