Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “What is the means test?”
Many people are under the mistaken belief that bankruptcy only happens to those with little or no income. After all, many people think that if you have a decent income coming in the door there should be no problem keeping up with bills, leading some to wrongly conclude that bankruptcy only impacts the underemployed. Sadly, a recent case discussed in the New York Times proves how even those with successful careers and large incomes can still fall into financial traps that leave them with few options.
The case of Gregory Owens illustrates how even a partner in a major law firm may not be able to dig their way out of a financial hole. Owens is a successful Wall Street attorney, a graduate of Vanderbilt Law School and a former equity partner at Dewey & LaBoeuf. After his former firm itself went bankrupt, Owens managed to land on his feet, becoming partner in an even bigger Manhattan firm, White & Case.
Though the new position, with it’s cushy corner office and big salary, would appear to solve his problems, Mr. Owens found himself in an ever-deeper financial pit, with his income easily depleted thanks to a host of expenses. According to his recent bankruptcy filing, Owens says that he has only $400 in a checking account and another $400 in savings. Beyond these liquid assets, he has $900 worth of clothing and an old watch that no longer works. That’s it.
Owens still has a sizable income, with the bankruptcy filing estimating his earnings at $375,000 per year. Though that would seem like more than enough money to pay bills, a quick tabulation reveals the trouble. Out of his $31,000 monthly income, $7,500 goes towards income tax, another $10,517 is spent on alimony, $2,300 goes towards insurance and $5,900 is spent on a mandatory retirement contribution. Between rent, utilities and transportation, Owens estimates that he actually ends each month in the red by $52.
Owens appears to have done everything right from a career standpoint, getting a great education, good jobs and continuing to move up the ladder, ultimately becoming partner in a large law firm. Despite his success, debt from the dissolution of his first law firm and substantial monthly expenses, have managed to overwhelm his sizable income. Owens’ case proves that bankruptcy can happen to anyone, regardless of age, education, or even income. The problems of being overwhelmed financially are universal and bankruptcy can be a relief for anyone struggling under the weight of unpaid bills, regardless of income bracket.
If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC today at (704) 370-2828. As professionals who are experienced in the bankruptcy arena, our attorneys will provide you with the best advice for your particular situation.
About The Author:
Bryan Stone is a Partner with Arnold & Smith, PLLC where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord tenant issues. Originally from Macon Georgia, Mr. Stone attended the University of Georgia for a BBA in Banking and Finance and went on to Wake Forest to earn his law degree. After law school Mr. Stone relocated to Charlotte where he has become quite involved in many local organizations. He is currently the Chair of “Bravo!” the young professionals organization of Opera Carolina, he also founded the UGA Alumni Association of Charlotte. In his spare time he enjoys perfecting his BBQ skills for the annual “Q-City BBQ Championships” and playing softball with the Mecklenburg County Bar Softball League.
“A Lawyer and Partner, and Also Bankrupt,” by James Stewart, published at NYTimes.com.
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