High Income No Bar To Bankruptcy
By L. Jed Berliner, Springfield Bankruptcy Attorney on Oct 26, 2007 in Bankruptcy Myths, Massachusetts, Role Of The Lawyer
Above median income does not stop anyone from getting bankruptcy relief. You are wrong - VERY WRONG - if you think otherwise.
A former client from 1997 came in today with her new husband. They need to improve his credit score so they can buy a bigger home with their suddenly larger family. They did their own online “research,” read the government’s website on Median Income, and came away with the belief that a family with income higher than median could not obtain bankruptcy protections. AWRGH!!!!! That it SO NOT TRUE.
10% of the Chapter 7 filers are above median income, and over 90% of those filers (or 99+% of the total Chapter 7 filers) still qualify after calculations of the remaining two parts of the entire Means Test (deduction of secured debt and IRS allowances, and comparison of any remainder with the amount of debt to be discharged to see if a meaningful percentage of debt could be paid).
Even the < 1% of the filers can still obtain debt discharges through a Chapter 13 repayment plan. Please, please, please! speak with an attorney before giving up.
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