Let's analyze the situation in a step-by-step manner:
1. Initial Income Information:
- The couple's combined annual income is \[tex]$91,215.
- One of them loses their job, which means a monthly income reduction of \$[/tex]3,200.
2. Annual Income Reduction Calculation:
- Since the income reduction is monthly, we need to calculate the annual reduction.
- [tex]\[ \text{Annual Income Reduction} = \$3,200 \times 12 = \$38,400 \][/tex]
3. Reduced Annual Income Calculation:
- Subtract the annual income reduction from the initial annual income to find the reduced annual income.
- [tex]\[ \text{Reduced Annual Income} = \$91,215 - \$38,400 = \$52,815 \][/tex]
4. Median Income Comparison:
- The couple has one child, so they are a 3-person family.
- According to the provided table, the median income for a 3-person family in Virginia is \[tex]$74,151.
5. Bankruptcy Qualification:
- To qualify for Chapter 7 bankruptcy, the couple's income needs to be below the median income for their family size. In this case, they must compare their reduced income to \$[/tex]74,151.
- [tex]\[ \$52,815 \leq \$74,151 \][/tex]
- Since \[tex]$52,815 is less than \$[/tex]74,151, they qualify for Chapter 7 bankruptcy.
6. Conclusion:
- Based on the reduced income being less than the median income for a 3-person family in Virginia, the couple can file for Chapter 7 bankruptcy. Chapter 7 bankruptcy typically allows for the discharge of all (or most) debt.
Therefore, the correct statement is:
a. They could file for Chapter 7 bankruptcy and discharge all of their debt.
