But I make too much money to file for bankruptcy.

If I hear that one more time I am going to scream. Ok, so usually what I hear is, “but <so and so> told me that I make too much money to file for bankruptcy.”

First of all, the only strictly true statement is that no one makes too much money to file for Bankruptcy.

What most people mean is that they believe that they make too much money to qualify for a Chapter 7 Bankruptcy filing. The problem with that statement is that qualifying for a Chapter 7 actually has more to do with what kinds of debt you have and what you actually spend your money on than it does with how much money you make.

The root of all of this misinformation is something called the Means Test. The Means Test was ostensibly created as a kind of gatekeeper for Chapter 7 Bankruptcy filings. I say ostensibly. I don’t think that was the real reason, but hey what do I know about politics and lobbyists paid by institutional creditors. The Means Test is an 8-page exercise in accounting trivia. It starts with income, then swings through expenses and certain kinds of debt. Having a problem passing the Means Test? Wait a few months to file and CHANGE THE THINGS YOU SPEND YOUR MONEY ON. Yep, it really can be that simple.

If you have been told that you make too much money to file for Bankruptcy and feel that you need to anyway, call a member of the National Association of Consumer Bankruptcy Attorneys for a second opinion.


4 thoughts on “But I make too much money to file for bankruptcy.

  1. sasisk
    Sheryl Sisk Schelin

    I heard this one just last week at a legal clinic I participated in at a local library. Two different attendees asked variations on this question, and one other recounted a story about a relative who’d been told this.

    It’s baffling. I don’t know what else we as as profession can do to educate the public but obviously we need to do more.

  2. Connie

    I was told that too and now I’ve had to sell everything I own plus am loosing my house because I wasn’t able to file bankruptcy because I make too much money. How sad!


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