Bankruptcy Mythbusting #8

Myth:  I make too much money to qualify for bankruptcy.

Fact:  Although it is possible to earn too much money to qualify for Chapter 7 Bankruptcy, there is no income limit on Chapter 13 Bankruptcy.  Even millionaires and billionaires can file for bankruptcy.  It's not about the money you make.  It's all about your debt to income ratio.  A person making $40k per year in income and no debt could be doing better than someone making $400k per year if the latter person has a bucket load of debt.

Several weeks ago, I saw an advertisement for some reality show - I believe it was Braxton Family Values, where one girl commented on another girl's house and pool "Is this what it means to be bankrupt?"  I thought the ad was amusing.

Bankruptcy is a very nuanced field of law.  I don't mean to give anyone the impression that if they file for bankruptcy, that they too could wind up in a Beverly Hills mansion with an olympic size swimming pool.  But the notion that "bankruptcy is for poor people" is incredibly short-sighted and ignorant.

They say a rising tide raises all ships.  But if a tide falls low enough, it can sink all ships, too.  During a good economy, most bankruptcy debtors tend to be low income individuals.  But in a rough economy, like we are experiencing now, the socioeconomic make-up of the average debtor has become far more affluent.  In short, people we used to consider wealthy and beyond bankrupt, they too are faced with mounting debt that their income falls short of being able to pay.

An experienced bankruptcy attorney can look over the facts of your case and predict fairly accurately what you can expect in both a Chapter 7 and Chapter 13 environment before you make any commitments.  Want to find out what bankruptcy could mean for you?  Call (920) 490-6160 now to schedule a free consultation.