Many people have the misconception that only individuals with a low-income deal with overwhelming debt. However, that is far from the truth. Individuals with a wide range of annual income deal with debt. If you make a lot of money but you are still struggling to make ends meet, you might be wondering if you can still file for bankruptcy. Our team at Wadhwani & Shanfeld breaks it down for you below.
Filing for Bankruptcy with a High Annual Income
Making a significant amount of money won’t stop you from filing for bankruptcy. However, it might determine the type of bankruptcy chapter you can file – whether it’s Chapter 7 or Chapter 13 bankruptcy.
Individuals with high incomes might not qualify for Chapter 7 bankruptcy. Chapter 7 bankruptcy is a liquidation bankruptcy that helps individuals wipe out their debt in as little as four months. To qualify for Chapter 7 bankruptcy, the bankruptcy court will take into consideration your income and deductible expenses after you take the means test. If the means test shows that you have too much disposable income left every month and your money isn’t only going towards necessary living expenses, you might not qualify for Chapter 7 bankruptcy.
It is more likely that you would qualify for Chapter 13 bankruptcy. Chapter 13 is a reorganizing bankruptcy type that groups your debts into one monthly payment that lasts for three to five years. To qualify for Chapter 13 bankruptcy, you do need to have disposable income to make those monthly payments. There are benefits to filing for Chapter 13 bankruptcy, such as getting the opportunity to keep many of your assets.
If you aren’t sure which type of bankruptcy you qualify for, our team at Wadhwani & Shanfeld can guide you through the process. We can help you take the means test and help you determine your bankruptcy filing options. Our team has helped over 25,000 individuals across Southern California rebuild their finances and their lives.
Contact us today at (800) 996-9932 to schedule a consultation!