The mere act of filing for bankruptcy, or considering it, signifies that a person has issues with their finances. It could be because of overwhelming debts, loss of suitable income, etc. Because of this, a lot of people who are considering bankruptcy as a solution don’t want to spend money on an attorney. After all, they don’t want to spend money that they don’t have.
However, the bankruptcy process is highly complex and nuanced — the only way to get through it successfully and ensure the best possible results is with the help of a lawyer who’s well-versed in the process.
Of course, this comes at a cost, but the investment is well worth it considering the favorable yield, i.e. getting approved for a Chapter 7 bankruptcy discharge or a Chapter 13 payment plan that is the most suitable for their financial situation.
A good rule of thumb is that the more money a person earns in income, the more money they should spend on a bankruptcy attorney. Here’s why.
More Income = More Complex Case
A Chapter 7 bankruptcy is relatively simple. In this type of bankruptcy, a person’s debts can be completely eliminated as long as they meet the qualifications, i.e. they have less than the median income. They merely have to list their creditors and they will more than likely get a discharge of their debts and start with a clean financial slate.
However, not all people qualify for a Chapter 7 bankruptcy. Because of the means test, those who have an income of more than the median average will not be able to take the easy Chapter 7 route. Instead, they will be referred to Chapter 13 bankruptcy.
In a Chapter 13 case, a payment plan will be procured for the debtor, which outlines how they should settle their debts in arrears for a specified period of time. This unique process becomes more complicated the higher a person’s income is. There are more matters to consider and more technicalities that come into the case.
The more money a person makes, the more a bankruptcy case becomes an investment, which is why hiring an experienced lawyer with a good track record is beneficial. While seasoned bankruptcy attorneys may charge higher for their services, in return, they yield favorable results and can help a debtor navigate their bankruptcy and receive the best outcome.