{"id":3116,"date":"2019-06-05T10:00:44","date_gmt":"2019-06-05T17:00:44","guid":{"rendered":"https:\/\/pdxlegal.com\/?p=3116"},"modified":"2022-04-13T05:56:05","modified_gmt":"2022-04-13T12:56:05","slug":"do-i-make-too-much-money-to-file-for-bankruptcy-in-portland","status":"publish","type":"post","link":"https:\/\/pdxlegal.com\/do-i-make-too-much-money-to-file-for-bankruptcy-in-portland\/","title":{"rendered":"Do I make too much money to file for bankruptcy?"},"content":{"rendered":"

It should come as no surprise that income matters when considering bankruptcy. \u00a0Yes, it is possible to make too much money to file bankruptcy. Every bankruptcy filing must be made in \u201cgood faith\u201d and if your income is high then the Court could determine the case was filed in \u201cbad faith\u201d and you might not receive a bankruptcy discharge. \u00a0However, as we detail below, there are many situations where you could file for bankruptcy even though you have a high income.<\/span><\/p>\n

First of all, the type of bankruptcy relief you need can affect this income analysis. \u00a0In Chapter 7 bankruptcy, which is the most common type of bankruptcy filed, your income is vital to determine whether the Court will grant you a discharge. \u00a0However, in Chapter 13 bankruptcy \u2013 the repayment type of bankruptcy \u2013 your income is much less important. Some people really need the help a Chapter 13 provides (such as asset protection, stopping foreclosures on your home, repaying tax debt) and thus the income hurdle is not important.<\/span><\/p>\n

For someone considering Chapter 7 bankruptcy, how much is too much income to file for bankruptcy<\/a>? \u00a0\u00a0\u00a0The answer to that question is based on your household size and your state of residence. If your household income is greater than the state median income, then you may face an income hurdle in filing for Chapter 7 bankruptcy. \u00a0The table below lists the current (as of April 2019) median income for various household sizes in Oregon.<\/span><\/p>\n\n\n\n\n
1 person<\/span><\/td>\n2 people<\/span><\/td>\n3 people<\/span><\/td>\n4 people<\/span><\/td>\n5 people<\/span><\/td>\n<\/tr>\n
$56,595<\/span><\/td>\n$68,375<\/span><\/td>\n$76,732<\/span><\/td>\n$90,600<\/span><\/td>\n$99,600<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

\"\"For bankruptcy purposes, your \u201cincome\u201d is based on gross income (before taxes) and includes things that we may not commonly think of as income such as (a) rent received from a roommate, (b) support, (c) tips and commissions, (d) employer provided allowances, and (e) regular gifts from family members to name just a few. \u00a0Like most things in the law the \u201cdevil is in the details\u201d so the assistance of an experienced bankruptcy attorney (like us!) cannot be overstated.<\/span><\/p>\n

As an example, let\u2019s assume Barbara lives alone and has a good salary of $4,700 per month before taxes and no other regular source of income. \u00a0\u00a0Barbara\u2019s annual income would be $56,400 and thus she would NOT make too much money to file for Chapter 7 bankruptcy. Now let\u2019s change it up and add in that Barbara receives each month a car allowance from her employer of $200 per month. \u00a0Now Barbara\u2019s annualized \u201cincome\u201d for bankruptcy purposes would be $58,800 and she MIGHT make too much money to file for Chapter 7 bankruptcy.<\/span><\/p>\n

Notice I said \u201cmight\u201d make too much money? \u00a0That\u2019s because in some fact patterns, even people whose income is too high as compared to the above table, can still file a Chapter 7 bankruptcy. \u00a0You see, the income is just the start of the analysis. If the income is too high, then we have to look at the type of debt a person has. The bankruptcy system favors secured debt (like home mortgages or car loans) and favors priority debt (like support obligations or tax debt). \u00a0We have done many (as in hundred\u2019s) of bankruptcy cases for people whose income is above the median level but we still get them through a Chapter 7. Once your income moves above the median, the analysis gets complex and convoluted with many traps for the unwary. If you are considering bankruptcy and your income is above the median dollar figure listed above, then I strongly suggest you retain an experienced bankruptcy attorney to assist.<\/span><\/p>\n

The bankruptcy system also cuts some slack to people who have failed businesses. \u00a0If more than 50% of your debt is business or tax debt (as opposed to consumer debt taken out for family or household purposes) then the median income analysis I have been describing simply does not apply. \u00a0Going back to Barbara\u2019s example above, even if her income is $58,800 and thus too high, if all of her debt is from a failed business, then the income won\u2019t matter and she can get through Chapter 7.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

It should come as no surprise that income matters when considering bankruptcy. \u00a0Yes, it is possible to make too much money to file bankruptcy. Every bankruptcy filing must be made in \u201cgood faith\u201d and if your income is high then the Court could determine the case was filed in \u201cbad faith\u201d and you might not […]<\/p>\n","protected":false},"author":1,"featured_media":3117,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,25],"tags":[],"_links":{"self":[{"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/posts\/3116"}],"collection":[{"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/comments?post=3116"}],"version-history":[{"count":1,"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/posts\/3116\/revisions"}],"predecessor-version":[{"id":36898,"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/posts\/3116\/revisions\/36898"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/media\/3117"}],"wp:attachment":[{"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/media?parent=3116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/categories?post=3116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/tags?post=3116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}