Bankruptcy and the ability to use bankruptcy to manage money when you have a lot of it has been in the news lately, thanks in part to the upcoming presidential election. The idea of a “rich person” filing for bankruptcy confuses many because they assume bankruptcy is something used by those in financial straits. Why would someone with a great deal of money even consider bankruptcy?
The truth is bankruptcy is a tool. People use it – people of average and extraordinary means – to get their financial lives organized and under control. It can eliminate responsibility for debt, but it can also make it possible for you to pay your debts under different arrangements. This is why bankruptcy can be an option for struggling businesses. There are many businesses that use bankruptcy to organize their finances and remain in business when they are struggling.
Wealthy often take a similar approach. They need to take a “time out” on their debt and get their financial situation organized. Just about anyone can use bankruptcy to fix their financial struggles and put an end to the problems caused by past due debt.
Types of Bankruptcy
So is there such a thing as being too rich for bankruptcy?
The key to determining if bankruptcy is an option or not is to first consider the type of bankruptcy a person plans to pursue. Chances are someone with money will not have the option of eliminating their debts, but he or she might be able to reorganize debts making them easier to pay.
It is also important to consider what is meant by someone “having money.” Often, a person has a great deal of assets, but would not be able to use that money to pay off any debts. His or her net worth might be high, but there is no money available to pay bills. This is often the case for those who are wealthy, but also to the average middle class homeowner in over his or her head on an expensive mortgage.
To learn more about the various types of bankruptcy, visit the US Courts page on Bankruptcy Basics.
Is it Actually More Common to Be Too Poor for Bankruptcy?
Perhaps a better consideration concerning bankruptcy is whether or not a person is too poor to file for bankruptcy. Bankruptcy is an option for the wealthy because they have the money to pay for filing and to work with experts who are able to help them create better financial arrangements.
Unfortunately for some, bankruptcy is not an option because of the money needed to pay to file. Many people briefly consider bankruptcy as a solution to their financial woes, only to find out it is too expensive to pursue.
If you are struggling financially and believe bankruptcy could help you get back on track – regardless of your current financial situation – we can help. We’ll explain your options and help you find a way to utilize bankruptcy if that is really what is best for you. To learn more or to speak to someone about the pros and cons of bankruptcy, contact the Law Offices of Robert M. Geller at 813.254.5696 to discuss your situation.