With the foreclosure filing and Chapter 11 bankruptcy of Oakridge Golf Club, a prominent country club here in Texas, we are reminded that the wealthy are also facing financial stress and seeking the protection of bankruptcy in record numbers. In 2009, the number of wealthy people filing Chapter 11 bankruptcy increased by 73 percent, with many of them citing foreclosure issues as the reason why they were filing bankruptcy. For those who are part of the upper middle-class, unlike the super rich who seemingly have unlimited incomes, the class of wealthy individuals filing bankruptcy are limited by the income of their high powered jobs or businesses to keep financial disaster at bay. That means that just like everyone else they must live within their means or end up bankrupt.
Many more upper middle-class individuals are finding themselves in bankruptcy court because in their efforts to expand their wealth they became over leveraged in an inflated real estate market that still has many ordinary Americans in its grasp. Wealthy individuals who became ensnared in ill-fated commercial real estate building projects found that financing was pulled and loans were called as the credit crisis and foreclosure crisis intensified. Without the ability to fund their building projects, and without the ability to repay their debts from their own pockets, many of these business men and women filed bankruptcy to keep from being totally financially destroyed. Fortunately for high income bankruptcy filers, Chapter 11 bankruptcy provides the same protections for their assets and allows them to settle their debts with creditors in a way that is legally enforceable.