Whether you’ve become overwhelmed with credit card debt, accumulated debts over the years that outweigh your income, or struggled financially for any other reason, filing for bankruptcy might be your best course of action. For most individuals, Chapter 7 bankruptcy is a popular option because it alleviates a large amount of debt and makes rebuilding credit possible for even the poorest scores. However, qualifying for Chapter 7 requires passing the Means Test, and if you have an income higher than the median Minnesota income for a household similar to yours, you may not qualify. Behm Law Group, Ltd. attorneys can help you determine if it’s possible to qualify for Chapter 7 bankruptcy in Redwood Falls, MN, even with your high income.
Despite how black and white the pass/fail system of the Means Test may seem, it is possible to find gray area when it comes to qualifying for Chapter 7 bankruptcy with a high disposable income. The Means Test is designed to weigh all the aspects of your financial situation, and as long as everything is documented correctly, it’s possible to qualify for Chapter 7 with a high income if your situation meets one or more of the following standards:
- Your number of financial dependents is high enough to overbalance your income. More dependents to support means more money spent out of your income.
- You owe child support, back taxes, overdue payments on car loans, attorney fees, mortgage, or other property.
- Your car or mortgage payments are high and prevent your income from being high enough to work with a debt repayment plan through Chapter 13.
- The majority of your debts are business related, not consumer related. This can include business and personal income tax debts, personal loans for business, and credit card debts accumulated from purchasing for your business.
- You are currently on active duty or have been active within the previous 540 days for the National Guard or other military reserve.
These standards act to balance out your income with your financial obligations and debts. Even with a high income, aspects of your financial situation may mean that the money you earn is outweighed by the money you spend.
For more information about the Means Test and filing for bankruptcy in Redwood Falls, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.