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

Norma Duenas

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Chapter 13 Bankruptcy Articles | Learn About Chapter 13

What is the minimum debt to File for Bankruptcy?There is a common myth that you need to be at least $10,000 in debt or more to file for bankruptcy. Nothing in the bankruptcy code specifies that you need a minimum amount of debt to file for bankruptcy.  There is nothing in the laws that prohibits you from filing for bankruptcy because you owe to little debt.

The key to whether bankruptcy is the right option for you, depends on whether it makes financial sense and what your objectives are in filing for bankruptcy. When you have a minimal amount of debt you should evaluate the different options available to eliminate the debt before filing for bankruptcy.  It may make sense for you to file for bankruptcy even with minimal debt if these factors are present:

  1. Paying the debt is the next 3 to 5 years is not feasible- Before deciding whether bankruptcy is the right solution for eliminating your debt, you should examine your income and budget. If it is clear that you will not be able to pay the debt within the next few years without sacrificing your necessities then filing may be a good option.
  2. Potential wage garnishment or legal action is currently pending- If there is a pending wage garnishment or bank levy from a creditor then filing for bankruptcy to stop the legal action may be beneficial.
  3. You do not want to deal with creditor calls or contact any further- Sometimes just the ability to have peace of mind and end creditor calls can be a sufficient motivator to file for bankruptcy. You may be fed up with creditor contact and you simply wish to end any further communication.

It is important that you make an informed decision about bankruptcy , regardless of how much debt you owe. Bankruptcy should not be excluded as an option simply because you feel that you do not owe enough money to creditors. It simply should make financial sense for your to file for bankruptcy protection, regardless of how much you owe. Talk to a local bankruptcy lawyer to review your options and make an informed decision.

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