How Much Debt Must A Person Have To Be Able To File Bankruptcy?
A frequent question I get is how much debt must you have to file bankruptcy? The answer to this question is there is no minimum amount of debt a person must have to file bankruptcy. This is something individuals must determine for themselves. Depending on your income and other financial considerations, anyone who is contemplating bankruptcy should determine for themselves whether bankruptcy is the right option for them. For example, let’s say a person has $10,000 in credit card debt. A person making an income of over $100,000 per year may not have a problem with this amount but, if you are making the minimum wage, $10,000 would be a huge sum of money. The Bankruptcy Court does not make this type of determination for you. Since bankruptcy is your right under the law only you can decide if you have enough debt to file bankruptcy.
You must take the filing of a bankruptcy case very seriously. If you are filing a Chapter 7 bankruptcy to erase all of your debts, then you must know you cannot file another Chapter 7 bankruptcy for eight years. Your bankruptcy right under the law is there for you at any time when you have determined to exercise it. The other consideration that must be considered is the damage a bankruptcy filing does to your credit. Everyone knows that filing for bankruptcy will damage your credit — probably not as bad as most people think, but it will damage your credit. So when an individual makes his or her determination of whether bankruptcy is the right choice the credit damage issue must be looked at. If the amount of debt a person has is beyond what he or she can ever pay off, then his or her credit will most likely be damaged either way. If you have so much debt that according to your income, family size and other financial issues you cannot reasonably pay it off, then bankruptcy may be the right choice.
Many people do not want to consider filing bankruptcy for a variety of reasons, and instead struggle along with their debts year after year making no progress in lowering the balances. Procrastination will not get you debt-free. In as little as a year or two, after filing for bankruptcy, most people will begin enjoying the benefits of good credit again. The credit cards, car loans and home loan ability will return. The person who knows he or she should have filed a bankruptcy, but for whatever reason does not, will most likely still be struggling with paying his or her overwhelming debt with no end in sight.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.