People file bankruptcy for a vast array of reasons, but for most people, the major factor that pushes them to the brink of bankruptcy is the stress of overwhelming debt. For some people, foreclosure of their home or repossession of the car is the reason, while others file bankruptcy to stop the harassing phone calls from a long list of creditors they owe. Even still, others file bankruptcy in an attempt to stop creditors from pursuing legal action against them for unpaid debts, including wage garnishments, bank levies, or liens on their assets.
A common question we hear from clients is, “How much debt do I have to have in order to file bankruptcy?” If you are curious about the answer to this question, our bankruptcy attorneys explain the answer for you right here.
Minimum Amount of Debt for Bankruptcy
The short and easy answer is: the bankruptcy code does not require you to accumulate a specific or minimum amount of debt. Generally, deciding whether or not to file for bankruptcy boils down to individual circumstances. Regardless of how much debt you have, because the decision to file bankruptcy is life-changing, it is important to take several factors into consideration.
Important Questions to Ask Yourself Before Filing Bankruptcy
Before you decide to file bankruptcy, you should ask yourself the following questions:
Can you repay your debts without filing bankruptcy?
Will your creditors work with you?
Are your debts dischargeable?
Does your attorney recommend filing for bankruptcy?
Chapter 13 Bankruptcy Maximum Debt Limits
While bankruptcy does not require you to have a minimum amount of debt, bankruptcy code does limit the amount of debt you are allowed to have if you want to file Chapter 13 bankruptcy. You are confined to $1,257,850 of secured debt and $419,275 of unsecured debt, although these limits increase every three years according to bankruptcy code. Since you are also limited to how often you can file bankruptcy, you might want to consider waiting to file if you have a low amount of debt.
Your Situation - Your Choice
Ultimately, this is your life and you know how much debt you can tolerate. If creditors are threatening to take your home or your car, levy your bank account, or garnish your wages, bankruptcy might be the best choice for you. However, just because there is not a minimum amount of debt to file bankruptcy does not mean it is the right choice for you. Discussing your financial situation with an experienced bankruptcy attorney can help you understand your options and whether or not bankruptcy is the right path to go down.
Are You Considering Filing For Bankruptcy?
If you feel bankruptcy is the best option for your financial situation you need to speak with an experienced bankruptcy attorney as soon as possible. Please contact us online or call our office directly at 888.348.2616 to schedule your free consultation.