Bankruptcy is often viewed as a tool for individuals with significant financial challenges, but what happens when high-income individuals in Texas find themselves in financial distress? Can high earners file for bankruptcy in Texas, and if so, what are the limitations? This blog explores the options available to high earners, the legal frameworks in place, and how a bankruptcy lawyer can guide you through the process.

The Means Test and High Earners

When it comes to filing for bankruptcy, the means test is a critical factor in determining eligibility, especially for those with substantial incomes. The means test compares your income to the median income in Texas. If your income exceeds this threshold, filing for Chapter 7 bankruptcy may not be possible. However, this doesn’t mean that high earners can’t file for bankruptcy—it simply limits the types of bankruptcy available.

For high-income earners, Chapter 13 bankruptcy may be a more viable option. This form of bankruptcy allows individuals to restructure their debt and establish a repayment plan based on their earnings and expenses. Working with a bankruptcy lawyer is essential in navigating the complexities of this process, especially for those earning well above the median income.

Income Thresholds for Chapter 7 and Chapter 13

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The income threshold for bankruptcy is determined by the median income for a household of your size in Texas. If your income exceeds this amount, you’ll likely have to file under Chapter 13. While Chapter 7 discharges most debts, Chapter 13 reorganizes them into manageable monthly payments over three to five years. High-income earners may find that Chapter 13 provides a structured way to manage overwhelming debts while keeping more assets.

A knowledgeable bankruptcy lawyer in Corpus Christi residents trust can help assess whether you qualify for Chapter 7 or need to pursue Chapter 13. Each case is different, and an experienced attorney can tailor a strategy that works for your unique situation.

Can High Earners Still Benefit from Bankruptcy?

Yes! Even if you’re a high-income earner, bankruptcy can provide relief from overwhelming debts. Here are some common scenarios where high earners can file for bankruptcy:

  • Credit card debt relief: High earners often carry significant credit card debt, which can become unmanageable despite their income. Bankruptcy, particularly Chapter 13, can help provide credit card debt reliefby restructuring repayment.
  • Stop debt collection harassment: Regardless of income, being hounded by debt collectors is stressful. Filing for bankruptcy initiates an automatic stay,which will stop debt collection harassment A bankruptcy lawyer can assist in enforcing this legal protection.
  • Preserving assets: Chapter 13 bankruptcy can allow high earners to protect certain assets, such as a home or vehicle, by restructuring debt instead of liquidating assets.

Seek Expert Guidance

If you’re a high earner in Texas considering bankruptcy, it’s crucial to have a knowledgeable attorney by your side. The complexities of bankruptcy laws, particularly for individuals with substantial earnings, make it essential to seek professional guidance. The Law Office of Joe Gonzalez, a dedicated debt relief law firm in TX, is led by me, Joe Gonzalez. At my firm, I personally provide expert advice on credit card debt relief, helping you stop debt collection harassment, and guiding you through the bankruptcy process.

For those looking for a bankruptcy lawyer in Corpus Christi, I am committed to offering personalized, effective legal services. Get in touch with me for a personal consultation, ensuring you receive tailored solutions and the best path to financial stability.