Bankruptcy Protection for the Bourgeois
The wealthy have many resources, material and otherwise, at their disposal to enable them to lower their tax burden, while the 99 percent must work gigs that issue 1099 forms and then pay back the lion’s share of our earnings to the IRS. It is also ridiculously easy to borrow huge sums of money when you are rich, and sometimes creditors don’t even seem to care whether you pay it back, as if lending money to you is a status symbol. Why then, do so many wealthy individuals, and even corporations, file for bankruptcy protection? How is it even possible? Isn’t bankruptcy protection for people who are one missed payment away from losing everything they own? Isn’t it what the United States has instead of debtors’ prison? A Plantation chapter 13 bankruptcy lawyer can help you understand the bankruptcy process and make wise decisions about it, even if your net worth is high enough that other people don’t understand why you would want to file for bankruptcy.
Are You Too Posh to File for Bankruptcy?
Federal bankruptcy laws give everyone the right to file for bankruptcy protection if they cannot pay their debts, no matter how rich or how poor. Not even the IRS or the divorce court can stop you from filing for bankruptcy, even though you will still owe your debts to them if your bankruptcy filing is successful.
When you file for bankruptcy, the court determines whether your debts, in their current form, are truly unpayable. Most of the time the answer is yes; the majority of bankruptcy cases get accepted. The court then reviews your financial statements and determines how much is a fair amount to ask you to pay, even though it is much less than the amount your creditors requested.
How Are High Asset Bankruptcy Filings Different?
Most individuals who file for bankruptcy do so under chapter 7 or chapter 13 of the bankruptcy code. The main difference between a chapter 7 bankruptcy filing and a chapter 13 bankruptcy filing is that, in a chapter 7 case, the court has the right to sell some of your assets and use the proceeds of the sales toward repayment of your debts. Meanwhile, in a chapter 13 case, you and your creditors agree on a settlement amount, which you pay in installments over several years, and at the end, the court discharges the remaining balance of your eligible debts.
In a chapter 7 case, assets that amount to basic necessities are exempt from liquidation; these include the house that is your primary residence and the car you drive to work. Therefore, low-income and middle-income people can usually get through chapter 7 bankruptcy without liquidating any of their assets. High-income people, however, are more likely to own multiple real estate properties and multiple vehicles. Therefore, if you own many valuable assets, a chapter 13 bankruptcy filing will help you protect them better than a chapter 7 case will.
Work With a Debt Lawyer About Bankruptcy at Any Income Level
A South Florida debt lawyer can help you strategize about filing for bankruptcy while protecting your assets. Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.