Tuesday, June 11, 2013

How much debt to you need to have to file Bankruptcy?

I get this question a lot - people want to know if there is a minimum amount of debt they need to have in order to file bankruptcy.  My answer is always the same - it's all relative. What I mean is that $10,000 of credit card debt may be enough for one person to file, but not enough for someone else. It all depends on the resources that someone has to get out of debt.

And by resources, I don't just mean income. Sometimes people have assets that they can sell and then go to their creditors with a settlement.  Or, maybe the only debt a person has is so old that the Statute of Limitations has run out and they can't be sued on the debt. In that case, they have legal resources available to avoid bankruptcy to handle their debt.

More often than not the decision to file bankruptcy will boil down to a person's income and expenses though.  If you find yourself able to only pay your basic living expenses off of your net monthly pay and there is nothing left to pay on your debt, it may be time to talk to a bankruptcy attorney. This could be true for someone who makes $30,000 per year, but just as true for someone who makes $150,000 per year. It all depends on their amount of debt, and their monthly living expenses. Thus, the question of how much debt one needs to file bankruptcy is not a clear cut answer - it is relative.

For more Oregon and Washington bankruptcy information, or to learn more about our firm visit www.pacificbankruptcy.com.  We practice Chapter 7 and Chapter 13 consumer bankruptcy and have helped thousands of people realize their dreams of living debt free.