You may assume that bankruptcy filings are designated for individuals who do not earn enough to adequately manage their piling debts. However, you may be eligible to undergo bankruptcy proceedings while still earning a significant income. Read on to discover whether you can file for bankruptcy if you have a high income and how a seasoned Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help you make this decision.
Am I eligible to file for bankruptcy if I have a high income?
For one, your high income may not bar you from filing for bankruptcy altogether. Rather, it may just decide which type of bankruptcy you are allowed to opt for.
For example, to qualify for a Chapter 7 bankruptcy filing, you must first prove that your household income is less than the median family income of your state. In New York State, as of 2023, this yearly median income is at $68,814 for a single individual; $84,958 for a family of two; $103,444 for a family of three; and $126,167 for a family of four. Then, an additional $9,000 is added for each additional family member.
If you do not pass this median family income test, then you may attempt to subtract your expenses from your income. The purpose of this is to total your disposable income and determine whether it is an insufficient amount to fund a Chapter 13 repayment plan. Actual and predetermined debts that may qualify for this are mortgage and rent expenses; vehicle and transportation expenses; utility bills and food; and more.
And if your disposable income is still too high, then you may turn to a Chapter 13 bankruptcy filing. With this, you will use your disposable income to pay off your debts in a three- to five-year repayment plan.
The bottom line is that a bankruptcy attorney may recommend that you pay off your debt on your own accord by using your high income; but your income will never be considered “too high” to declare bankruptcy in the first place.
What financial habits may constitute a bankruptcy filing?
You may think that, with a high income, you can handle your debts by yourself. However, if you see yourself falling into a habit of poor financial behaviors, then you may want to reconsider bankruptcy. That said, the following financial habits may constitute a bankruptcy filing:
- You are tending to use your savings, retirement, and/or emergency funds to pay off your monthly bills.
- You are tending to pawn your valuable possessions or family heirlooms to pay off your monthly bills.
- You are tending to ask your loved ones to co-sign loans to pay off your monthly bills.
You must not hesitate and reach out to a competent Rockland County bankruptcy attorney as soon as you possibly can. Our team at The Law Offices of Allen A. Kolber, Esq. will be awaiting your phone call.
