It's a common misconception that filing for bankruptcy is only a step for middle-aged individuals. In actuality, the process benefits individuals across multiple generations that are facing stressful financial situations. Here's a closer look at how age impacts bankruptcy proceedings. 

Are There Age Restrictions on Filing for Bankruptcy?

There are not currently any laws in place that limit bankruptcy proceedings to a particular age range. While individuals in their early 40's are most likely to take part, around 2% of filers are under 25 years of age. Basically, any legal adult — age 18 years or older — can file a case. In the event someone under 18 needs to file, court approval is usually required. 

Should I File for Bankruptcy?

Qualifications

Before a person can file for bankruptcy, they have to meet the qualifications. Chapter 7 bankruptcy is the strictest, requiring filers to pass an official means test.

Typically, a person's household income needs to be less than the state's median — $55,679 in Georgia. However, when earnings are higher, the court considers additional living costs and debt totals. 

Chapter 13 bankruptcy doesn't have income requirements. If the household income level is higher than the state minimum, then the repayment plan extends to a five-year period instead of three years. However, the filer's debt must be less than a specific amount — currently $394,275 for unsecured and $1,184,200 for secured. 

Reasons

There are a variety of situations that lead people — both young and old — to choose bankruptcy. Drowning under unsecured debt, like credit cards and personal loans, is one of the most common.

Young filers, especially, have easy access to these types of accounts, yet they seldom have the stable income necessary to keep up with payments. By eliminating or reducing the total, it provides a fresh start. 

Considering filing for bankruptcy? Reach out to Hurtt & Johnson, LLC in Dalton and Calhoun, GA, to learn more about your options. For over 40 years, the local law firm has provided clients across Whitfield County and northwest Georgia with personalized guidance and representation. Review their experience online, and request a free initial consultation by calling (706) 226-5425.