By: Scott B. Riddle, Esq.
According to an article by Carrie Teegardin on today’s Atlanta Journal Constitution, Georgia led the nation in bankruptcy filings for the first three quarters of 2006. The State was also second, behind Tennessee, in number of filings per 1,000 residents.
During this erratic period for bankruptcy filings, Georgia jumped to the top not because of any startling new trend, but because filings didn’t decline as much here as in other large states…. For example, in California, which usually tops the charts, filings were 75 percent lower in the first three quarters of 2006 than in the same period of 2005. In Georgia, filings dropped by 51 percent during that period…
Chapter 13 filings are more common in Georgia than Chapter 7 —- a liquidation in which most debts are wiped out, but so are all of a consumer’s assets that aren’t protected by exemptions… The impact of the federal bankruptcy reforms was not as great in Georgia because the reforms targeted Chapter 7 filings, requiring consumers to meet income tests before they can file….
For most who file for bankruptcy, the debt load is crushing. The average consumer filing for bankruptcy who sought court-mandated counseling from CCCS had an average annual income of $30,222 and unsecured debts totaling $41,980.
According to Consumer Credit Counseling of Atlanta, they conducted 130,000 Bankruptcy counseling sessions this year —
Average annual income: $30,222
Average mortgage payment: $859
Monthly deficit: $1,990
Unsecured debt: $41,980
Net worth: -$31,254
Average credit score on a scale of 300 to 850: 518