Can you make too much money to file for chapter 13 bankruptcy?

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I am a territorial sale representative for a company selling heavy manufacturing equipment. My business and commissions have declined, though I’m still making around $200,000. Unfortunately, back when I was making more like $350,000 a year, we overextended ourselves, so even though I’m making a good living still, we can’t afford our monthly payments. Is Chapter 13 bankruptcy something we should consider, or am I making too much for it? Thank you.


Eligibility for a Chapter 13 bankruptcy—the type of bankruptcy in which your debts are adjusted and you are given a court-monitored payment plan to discharge them—does not depend on income level. Any individual, no matter how much he or she earns, could file for Chapter 13. What might be a bar or impediment to you is that there is a limitation on how much debt you can owe. In order to file Chapter 13, you have to owe less than around $360,000 in unsecured debts and less than around $1mm in secured debts (such as mortgages, home equity lines or loans, or car loans). The exact amount is adjusted periodically, to reflect inflation; a bankruptcy attorney can apprise you of the up-to-the-moment levels, if you’re close enough to those thresholds that you need to check.

It’s the other main form of bankruptcy available to individuals, Chapter 7, which looks at your income to see if you are eligible to use it.