Is high income bankruptcy an option for me?
When you have a high income, you are probably also a leading member of your community. This can make life stressful, especially when your high income doesn’t create the financial balance for your family that it once was. In that case, you might be wondering what your options are, because bankruptcy usually requires a means test – and you don’t want your friends and neighbors to know that you are considering filing for bankruptcy, anyway.
Do you have options? Can you file for bankruptcy? Are there ways to protect your reputation and security in the process? At Van Horn Law Group, we have the answers you need!
Do high-income earners have bankruptcy options?
You may have heard that people who file for bankruptcy must have specific qualifications. Generally called a means test, these specifications may involve the recognition of their income. In some cases, a remarkably high income will prevent a person from qualifying for certain types of bankruptcy.
However, this is not always the case. the bankruptcy means test is designed to ensure that people who earn more than enough to repay their debts do not use bankruptcy to avoid doing so. However, if your debts are more than the amount you are bringing home, you may still be eligible for bankruptcy. In this case, you would probably go through a process known as bankruptcy of high incomes.
what High income bankruptcy?
Few things are more frustrating than going bankrupt as a high income person. You are making a lot of money – you should be able to enjoy that money while paying your bills! Unfortunately, life doesn’t always work that way. There are many reasons why a person can get into debt, and many of them are either unavoidable or difficult to navigate without expert legal and financial advice.
Whatever your reason for facing bankruptcy, doing so on a high income can be confusing. The most important thing you can do is not listen to people who are not bankrupt lawyers. These people may give you inaccurate advice, most of which will only hurt your already awkward scenario.
Sometimes even inexperienced lawyers can tell you that you don’t qualify for bankruptcy. Just because someone goes bankrupt does not mean they understand the intricacies of high income bankruptcy. These scenarios may be entirely different from typical bankruptcy cases, so it is imperative for your success that you work with an experienced legal team who know these unique challenges and how to overcome them.
Bankruptcy of high incomes is mainly different because those who apply are not subject to the same means test as ordinary bankrupt filers. They have different types of debt, which requires a different kind of solution. This is why so many people mistakenly believe that they do not qualify for bankruptcy with a high income – which is simply not true.
Consumer and non-consumer debt
How are high income filers different from the typical bankruptcy filer? In most cases, they have a different type of debt. The typical bankrupt client has mainly consumer debt. It is the debt that is incurred in the consumption – or use – of things. It is also called personal consumption debt because this debt is incurred when purchasing consumer goods for the person themselves or members of their family or household.
People with high incomes often have what is called non-consumer debt. This debt is incurred due to business expenses. This can include many expenses, including, but not limited to:
- Real estate investment costs
- Used vehicle auto loan
- Business insurance and lines of credit used for business expenses
- Utilities and other daily expenses incurred in running a business
There are many other ways to incur non-consumer debt. Still, those details aren’t that important: Holders of non-consumer debt typically don’t go through the same bankruptcy pleas test as regular bankruptcy applicants. This allows them to make a lot more money without being penalized for it like the average filer would.
A competent lawyer who understands bankruptcy of high incomes start by establishing the types of debt you have. They will work with you to labile any debts that might qualify as non-consumer debt so that your debts are less likely to count against you during the bankruptcy process.
Make sure you are honest and up front with your legal team early in the bankruptcy process. Why? Because all the details of your finances will be exposed during a bankruptcy. If you hide anything from your legal team in the process, they can’t prepare you – or protect you – for the consequences of it.
How can I be sure that my privacy and my profile will be protected?
Now that you know that bankruptcy may be an option for your unique scenario, how can you be sure that your privacy and dignity will be spared in the process? High income earners often cite this as a major concern, and with good reason. You have a lot more to lose than the average person!
Fortunately, an experienced bankruptcy lawyer will know this and be ready to help you protect that privacy. Discretion is essential, and a seasoned lawyer will be able to help you navigate the process of successful bankruptcy without violating this. Plus, they’ll have the kind of knowledge you need to help start the process of rebuilding your credit and improving the outlook for your financial future!
If you’re still curious about the ins and outs of bankruptcy of high incomes, call it Van Horn Legal Group, (954) 765-3166. They can walk you through the process of filing for bankruptcy and get you the fastest and best possible outcome.