We Have a Million Dollars of Debt and Need to File Bankruptcy. – Ruthie

“Dear Lewis,

Our income is 18,000/month, secured debt (mortgages) is $1,050,000, Unsecured debt (credit cards, personal loans, medical bills) is 270,000. We have a single family home assessed 707K and multifamily assessed 575K that we need to keep. We’re a family of 5 w/3 dependents.

We earn too much income to file Chap 7 and our secured debt is over the limit for Chap 13. Since we’re ineligible to file Chap 13, in our case could we file Chap 7 anyway? If not, Would you please tell us what options would be available to us?


Dear Ruthie,

I assume there are car loans? If you are certain that your total secured debt is $1,050,000, then you should be able to file a chapter 13 (the secured debt limit is about $1,080,000).

But if you know you are over the debt limits, then you would need to file a chapter 11 bankruptcy (VERY expensive attorney fees).

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If you fail the means test, then the presumption of abuse arises in a chapter 7. I would imagine you would lose a hearing in front of a judge. A family with $18,000/month income should not be in chapter 7.

You need to make sure you are over the secured debt limit. If you are that close, I would imagine you could pay down some secured debt to get under the limit.

But this takes careful planning. You need to speak to an experienced bankruptcy attorney.

Good luck!

My name is Lewis Roberts and I’m an attorney licensed in Florida and Georgia. My practice focus is consumer bankruptcy, real estate issues/closings, and mortgages. I also have Florida real estate broker and mortgage broker licenses. I am a proud member of the National Association of Consumer Bankruptcy Attorneys (NACBA), National Association of Consumer Attorneys (NACA), and a graduate of Max Gardner’s Bankruptcy Boot Camp. I enjoy helping people with decisions that impact their financial well-being.

Legal Disclaimer: This is for educational purposes only. It is not to be relied upon as legal advice. It also does not create an attorney-client relationship. No such relationship is formed with attorney without a written agreement.

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