How Much Debt Do I Need to File for Bankruptcy Protection?

How Much Debt Do You Have to Have to Be Eligible for Bankruptcy Protection?

If your debt load has become unmanageable and you have considered using bankruptcy to get a fresh start, you may be worried that there is a minimum debt requirement you must have to be able to file. There is not—you can seek bankruptcy protection for any debt that you have. For most people, the relationship between your monthly expenses and monthly income (after deducting any payments for debts that you have) will determine whether you can permantently discharge your debts through a Chapter 7 bankruptcy or permanently discharge your debts through a Chapter 13 bankruptcy. Even though you can file bankruptcy with any amount of debt, you want to do a cost-benefit analysis of taking such an action. There is life after bankruptcy—you can reestablish your credit, so that you will be eligible for credit cards, personal loans, auto loans and mortgages. However, a bankruptcy filing will have an immediate impact on your credit rating, and will limit your options for a period of time. The important question? Is the relief that you will get from bankruptcy sufficient to warrant the effect a filing will have on your ability to obtain future credit?

To make this determination, you will need to look at the size of your debt load, the willingness of your creditors to work with you to restructure payments outside of a bankruptcy, and your potential to earn enough to pay off creditors in a reasonable period of time. At John W. Hargrave & Associates we can help you explore these options.

There are some questions to ask yourself, to help you determine if bankruptcy might make sense for you.

  • Are you using credit cards to maintain your lifestyle, but unable to pay off as much as you charge each month? In other words, is your debt load continually going up?
  • Have you defaulted on any type of loan?
  • Have you had foreclosure proceedings filed, or have you received notice of repossession?
  • Do you spend time every day worrying about how you will pay your bills?
  • Have you overdrawn your checking account more than twice in the last six months?
  • Do you and your spouse argue about money more than once a month?

If you can answer yes to one or more of these questions, it may be time to at least consult a bankruptcy attorney, to determine the advantages and disadvantages of a bankruptcy filing.

Contact John Hargrave and Associates

We have provided comprehensive counsel to individuals in and around Barrington, New Jersey, since 1977. To schedule a free initial consultation, contact our office by e-mail or call us at 856-547-6500.