Use the following table to help answer the question below.
| State | Single-Earner | 2-Person | 3-Person |
| :-------- | :------------ | :------- | :------- |
| Florida | $41,226 | $52,259 | $58,574 |
| Georgia | $40,691 | $55,258 | $61,104 |
| Missouri | $39,645 | $51,568 | $60,371 |
| Texas | $38,940 | $55,859 | $59,222 |
| Virginia | $48,362 | $65,122 | $74,151 |
A family of three living in Georgia is thinking about filing bankruptcy. In order to file for Chapter 7 bankruptcy, what must be true about their monthly income?
A. The family's monthly income must be less than $5,092.
B. The family's monthly income must be more than $5,092.
C. The family's monthly income must be less than $4,605.
D. The family's monthly income must be more than $4,605.
Answer (2)
Find the annual income for a 3-person family in Georgia from the table: $61 , 104 .
Divide the annual income by 12 to find the monthly income: 12 61104 = 5092 .
Determine the condition for bankruptcy based on the calculated monthly income.
The family's monthly income must be less than $5 , 092 to qualify for Chapter 7 bankruptcy: The family’s monthly income must be less than $5 , 092.
Explanation
Identify the Annual Income First, we need to determine the monthly income threshold for a 3-person family in Georgia to file Chapter 7 bankruptcy. We will use the provided table to find the annual income for a 3-person family in Georgia.
Extract Annual Income According to the table, the annual income for a 3-person family in Georgia is $61 , 104 .
Calculate Monthly Income To find the monthly income, we divide the annual income by 12: 12 61104 = 5092 So, the monthly income is $5 , 092 .
Determine the Condition for Bankruptcy Now, we need to determine what must be true about their monthly income in order to file for Chapter 7 bankruptcy. The question implies that there is an income limit. Since the monthly income is $5 , 092 , the family's monthly income must be less than $5 , 092 to qualify for Chapter 7 bankruptcy.
State the Final Answer Therefore, the correct answer is that the family's monthly income must be less than $5 , 092 .
Examples
Understanding income thresholds is crucial in financial planning. For instance, knowing the bankruptcy income limits helps families assess their eligibility for Chapter 7 bankruptcy, guiding them in making informed decisions about debt management and financial recovery. This knowledge is also useful in determining eligibility for various assistance programs, such as food stamps or housing assistance, which often have income-based requirements. By understanding these thresholds, families can better navigate their financial options and access available resources.
In order for a family of three in Georgia to qualify for Chapter 7 bankruptcy, their monthly income must be less than $5,092. This is determined from the annual income of $61,104 divided by 12 months. Thus, the correct answer is Option A: the family's monthly income must be less than $5,092.
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