Do You Make Too Much Money To File For Bankruptcy?

October 22nd, 2008 by Reed Allmand

So many Americans facing mounting debts never consider bankruptcy because they’re under the often false assumption that they make too much money. But the reality is that thousands of Dallas-Fort Worth consumers file for bankruptcy every year even with incomes over $100,000.

To find out if you qualify under Chapter 7 bankruptcy you need to calculate your household income. To determine your household income, the bankruptcy law requires you to use a special formula which averages your income over the last six months before filing. Once you determine your household income, you can compare it to the family median income for the state of Texas. See below:

Texas Family Size Median Income
1 $36,285
2 $51,355
3 $53,803
4 $61,511

Add $6,900 for each additional individual in the household.

Is your household income less than the income for a similar sized family? If so, you’re eligible to file for Chapter 7 bankruptcy. But even if your household income is more than the median income for Texas you are allowed to deduct certain expenses from your income under the bankruptcy law, such as housing, food, transportation, taxes, insurance and many other items. Taking these deductions will usually reduce your household income, bringing it below the Texas median income.

Speak with your Dallas- Fort Worth attorney today to find out if you qualify for Chapter 7 or Chapter 13 bankruptcy.

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About Reed Allmand

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Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."

View all posts by Reed Allmand

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FAQ

Why do I need to submit a new wage order when I modify my plan

When we modify your bankruptcy plan we are changing your plan payments. This means that we have to get with your employer and change the terms and amount of your wage order. The only way we can do that is by filling out a new wage order form.  

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If the bankruptcy stay terminates on your home that means that even though your in bankruptcy, your creditor can pursue all there legal remedies they can pursue if you were not in bankruptcy. This includes foreclosure, and having your house sold and evicting you from your house.

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