QUESTION
Do I need a minimum amount of debt to file a personal bankruptcy?
Asked on Dec 13th, 2016 on Bankruptcy - Colorado
More details to this question:
I only have $9,000 debt and I have been told that I need to have at least $10,000 to file a personal bankruptcy in my state under any chapter.
10 ANSWERS
Insolvency is relative to your income. If the $9000 debt is impossible for you to pay off, you can still file.
Answered on Feb 10th, 2017 at 5:39 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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There is no minimum amount of debt required to file bankruptcy. The question is whether is whether you are unable to handle your debt without filing bankruptcy.
Answered on Feb 10th, 2017 at 5:38 AM
Bankruptcy Attorney serving Alpena, MI
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Carl C. Silver Attorney at Law
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No.
Answered on Feb 09th, 2017 at 12:39 PM
That statement is completely false. There is no law that requires you have at least a certain amount of debt to file bankruptcy.
Answered on Feb 09th, 2017 at 12:39 PM
There is no minimum level of debt for a BK. The analysis is weighing income versus debt.
Answered on Feb 09th, 2017 at 12:39 PM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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Bankruptcy is a federal matter-and the state has only a small role to play. No state can require a certain amount of debt for you to be free to exercise your right to file bankruptcy. While $9,000 is not a huge load of debt to many people, it may be an unacceptable burden to you. Nothing I know of keeps you from filing a bankruptcy petition with that amount of debt. That said, it's always a good idea when you're about to get involved in a court matter to hire a skilled lawyer.
Answered on Feb 09th, 2017 at 12:39 PM
Bankruptcy law does not require you to have a minimum amount of debt to file, but I would not accept your case with debt twice the amount you indicate you owe. The problem you face is called the good faith test. This requires you to show that you could not pay even a quarter of your debt (in your case, $2,250) over 3 years if you just spent your money on necessary living expenses. I find too many people cannot meet that criteria, as they spend money on things that are not true necessities, or spend a lot more than they need to for necessities. In addition, bankruptcy is only available to eliminate debt infrequently. If you file bankruptcy today and in a year, have an expensive hospitalization, what will you do when you owe $100,000 or more. Count your blessings. Your problem is big to you, but small to the bankruptcy process. Other options are available.
Answered on Feb 09th, 2017 at 12:38 PM
1 Award
There is no set minimum amount of debt to file a bankruptcy. From a practical standpoint, $10,000 is a pretty good rule of thumb for a minimum amount. You need to look at the possibility of paying the debt off over the next 2 years. If that is a realistic possibility, then you probably shouldn't file. However, if the debts are all going to collection and they are adding on collection fees, attorney fees, court fees, etc., then maybe you should file before the debt grows even larger. The analysis is based more on your ability to pay than on the amount of debt.
Answered on Feb 09th, 2017 at 12:35 PM
Bankruptcy Attorney serving Myrtle Beach, SC
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Law Office of Margaret L. Evans, PC
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There is no minimum debt level necessary to file in SC.
Answered on Feb 09th, 2017 at 12:35 PM
There is no dollar limit. Simply your inability to pay all your debts as they become due.
Answered on Feb 09th, 2017 at 12:34 PM