Supremacy Clause

• Under the Supremacy Clause of the U.S. Constitution, federal law preempts state law. Accordingly, the state of Georgia does not have the power to set a minimum debt requirement for bankruptcy filers, because bankruptcy is governed by federal law. Bankruptcy laws are written by Congress. While Congress did carve out portions of bankruptcy law for states to govern, such as the value of various property exemptions, the question of who may file bankruptcy is governed by federal law alone.
  
  

Chapter 7

• There is no minimum debt requirement for filing a Chapter 7 bankruptcy. Chapter 7 is the bankruptcy option that relieves debtors of personal liability for certain debts in exchange for allowing the bankruptcy trustee to liquidate portions of the debtor's property that are not protected by law. While Chapter 7 bankruptcy does not have a minimum debt requirement, it does have a maximum income requirement. Chapter 7 debtors must pass the “means test” to qualify for bankruptcy filing. The means test looks at the debtor's income and family size. If the debtor’s income exceeds the median income of residents of the debtor’s state with the same family size, then the debtor fails the means test and may not file Chapter 7 bankruptcy.
  
  

Chapter 13

• No minimum debt requirement for filing a Chapter 13 exists either; however, an earnings requirement and maximum debt requirement must be met. Chapter 13 bankruptcy allows debtors to retain their property in exchange for making regular payments toward their arrearages over a three to five year period. Under this chapter, on the date of filing, only debtors with typical income that owe noncontingent, liquidated, unsecured debts of less than $250,000 are eligible for Chapter 13; only debtors with noncontingent, liquidated, secured debts of less than $750,000 are eligible to file Chapter 13.
  
  

Chapter 12

• There is no minimum debt requirement for filing a Chapter 12 bankruptcy; however, a Chapter 12 does have an earnings and occupational requirement. Chapter 12 is like a Chapter 13 in that it allows qualifying debtors to repay debts over a three to five year repayment plan. Chapter 12 debtors must have regular annual income and, unlike other debtors, must be either family farmers or family fisherman.