I recently spoke to a potential client who said to me, “Hey Jeff, I need to cancel my appointment with you tomorrow because my friend told me that I make too much to file bankruptcy.”
“Is your friend a bankruptcy attorney?” I asked.
“No.” He responded.
Until a qualified bankruptcy attorney completely reviews your entire economic situation, no one should say that you make too much to file.
With some high income earners, it makes sense to file Chapter 13 to stop all of the interest and late penalties on credit card debt. In many situations, a bankruptcy filer is able to consolidate all of the loan payments into a single Chapter 13 plan and consolidate all credit card bills.
Even in a 100 percent Chapter 13, the credit card companies can no longer charge you any interest or late fees. For many people, Chapter 13 is a great tool for eliminating credit card debt.
In addition, while you are in an active Chapter 13 bankruptcy case, no one can sue you, call you, or harass you.
I’ve had some potential clients tell me that they went online and filled some means test calculator that says they will have to make a huge Chapter 13 payment that they cannot afford. My first response to this is that most clients have no idea how to take the proper deductions which would reduce that required monthly payment. For that matter, most attorneys don’t know how to do it either. I’ve had many clients that were pleasantly surprised that I was able to make the means test work.
Also, even if you have a super high number at the end of a bankruptcy means test, you will never be required to pay back more than 100 percent of your debt. In other words, as long as you are in a 100 percent Chapter 13 plan, the number at the end of the means test really does not matter.
The bottom line is this: talk with a real bankruptcy attorney before you decide that you don’t qualify. You never know….you might be pleasantly surprised.
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3. How much does it cost to file?