Could Chapter 13 bankruptcy help you in between executive jobs?

Could Chapter 13 bankruptcy help you in between executive jobs?

| Sep 25, 2020 | Bankruptcy

Having the skills, education and experience to perform an executive job can be a mixed blessing. On the one hand, you can command a higher wage than many other professionals and benefit from the procedures associated with your title. On the other hand, it costs a lot to maintain the necessary appearance as someone who can command such a role at a company.

Many professionals and executives carry significant levels of revolving debt because they need to maintain appearances for their co-workers, clients and employers. If you have recently found yourself laid off or between jobs, you could very well deplete your severance package or savings while still carrying unsustainable levels of debt.

If you are still between positions or have just started a new one, it might be some time before you can regain your financial equilibrium. Chapter 13 bankruptcy could help you if creditors have started to take more aggressive action against you.

Chapter 13 bankruptcy is ideal for those with higher incomes

Chapter 7 or liquidation bankruptcy has a means test that individuals must pass to file. If your income is above the state median for your household size, you likely won’t qualify for Chapter 7 proceedings.

Chapter 13 bankruptcy can be a better option for those who make more money and who have more assets. You can have substantially higher income than the state median and still qualify for a Chapter 13 filing. You can also breathe a sigh of relief because your personal property isn’t subject to liquidation during this kind of bankruptcy. 

Chapter 13 bankruptcy

Another benefit of Chapter 13 bankruptcy is that it allows for the restructuring and short-term repayment of the debts you hope to discharge. Making an effort to repay debts and negotiate with your creditors can be a decision that helps you after your discharge.

Given that those who employ executives often scrutinize their credit history as well as their job history, being able to demonstrate that you made every effort to repay your creditors can leave a more positive impression than simply seeking a discharge in Chapter 7 proceedings. If you have significant debt and wonder about your options, discussing your situation with an attorney can be a wise decision.