Filing bankruptcy is an often complex and confusing situation for many. As such, there are many misconceptions about this process. One of the most common myths is that high earners cannot file for bankruptcy. Though this is far from the truth, there are some limitations you may experience if you have a higher income. If you are a high-earner looking to file for bankruptcy, the following blog explores your options to help you regain control over your finances. You’ll also discover how a Memphis, TN Chapter 13 bankruptcy lawyer can assist you through this complex process.
How Can I File for Bankruptcy With a High Income?
Generally, consumers who want to file for bankruptcy have two options – Chapter 7 or Chapter 13. Chapter 7 bankruptcy is an option that quickly liquidates your assets to repay your debts in a shorter timeframe. Chapter 13 allows the debtor to repay their creditors over a three- to five-year period before the remainder of the qualifying debt is dismissed.
Generally, high-income earners will file for Chapter 13 bankruptcy. This is because you must pass a means test to qualify for Chapter 7. Essentially, if your monthly income is less than the median for the state you live in, you can file for Chapter 7. If you earn more, you must file for Chapter 13 instead. However, if the average income in your state is high, you may still qualify for Chapter 7.
It’s important to note that filing for bankruptcy does have some disadvantages. The most crucial comes with the fact that bankruptcy will remain on your credit report for years, impacting your credit score. Chapter 7 will remain for ten years, while Chapter 13 will be on your report for seven. It may be more challenging to secure loans with bankruptcy on your report.
How Can a Tennessee Bankruptcy Attorney Help Me?
Filing for bankruptcy can be an incredibly complex process. When you declare bankruptcy, you must list all debts owed, your income, and all of your assets. If you forget to include a debt when filing, you will not receive forgiveness for that debt. If you intentionally do not list all of your assets, it may cancel out your bankruptcy, as this constitutes fraud.
As such, it’s in your best interest to enlist the help of a bankruptcy lawyer. Not only can they help ensure you complete all necessary forms in full, but they will also help make sure you haven’t forgotten a debt or asset to help you achieve the best possible outcome. Aside from assisting you with the forms, they can help guide you through the bankruptcy process to ensure any questions or complications are handled to help you reap the full benefits of filing for bankruptcy.
At the Arnold Law Firm, we understand how stressful debt can be. Unfortunately, one unexpected bill can snowball into a lifetime of debt. As such, we are determined to help those in Tennessee regain control of their finances through bankruptcy. If you’re a high-income earner, we can help. Contact our firm today to learn how we can help you through this process.