When someone is having severe issues with debt they may contemplate bankruptcy. But this brings up a number of questions. One of those questions is if there are any minimum or maximum limits on being approved for bankruptcy. The answer to that is one you should get from a bankruptcy attorney in your state. This blog post is for information and entertainment only and is not intended to be, nor should it be construed as legal advice. That said, it depends on the type of bankruptcy that you file.
There are no minimum amounts on filing for bankruptcy regardless of what type that you file. That said, if the amount was minimal enough it probably wouldn’t make much sense. Often there may be other considerations that could help you satisfy your debt without the burden of having a bankruptcy on your record.
Is It Possible To Pay The Debt Without Bankruptcy?
For obvious reasons avoiding bankruptcy is best when it’s possible. If there is a way to repay the debt without filing bankruptcy it is recommended that you do so. Sometimes it’s necessary to seek out a counselor or an agency that might be able to help you understand ways to negotiate with your debtors for the purpose of repaying them without bankruptcy. It’s always best to look for all alternatives before making the final decision to go forward with the bankruptcy.
Chapter 13 Bankruptcy
This type of bankruptcy will mean that the judge determines the total monthly amount that the person filing for this type of bankruptcy can afford to pay back. Although there is no minimum amount required to file this type of bankruptcy there are maximum limits depending on whether the debt is secured or unsecured debt. Any secured debt less than $1,184,200 or less, or unsecured loans that are just under $395,000 can be filed under chapter 13.
This type of bankruptcy does not completely eliminate your responsibility of paying the debt. On the contrary, it means that the court will decide the total monthly payment and then distribute that payment between debtors. This means that each month you will be responsible for paying the court and then the court system will distribute the payments to each debtor as per the judge’s decision.
Chapter 7 Bankruptcy
When filing for this type of bankruptcy the law does not set any minimum or maximum amounts for filing bankruptcy. It’s important to remember that if all other possibilities have been tried and there’s no other alternative, this is a legal remedy for relieving you of the burdens of debt. There are all kinds of different people that come from many different walks of life that have found themselves in a position of having to file for bankruptcy.
When it comes to filing chapter 7 it will depend on the state you live in as to whether or not there are income requirements and other thresholds used to determine whether or not you qualify for this type of bankruptcy. In fact, one of the biggest factors in determining if someone qualifies often has nothing to do with the amount of debt that the person has but rather the total income that they have. It is also important to know what exemptions exist.
Reasons That Someone Might Decide To File For Bankruptcy
If a person reaches a point where they file for bankruptcy it doesn’t make them a bad person. It just means that they have too much debt and there could be any number of circumstances that led to that situation. Some of the reasons that a person might consider filing for bankruptcy could include when they are being sued.
If something has happened by accident and this has led to someone suing you and you are now responsible for paying an amount of money that is way beyond your means, then this could put you in the position of needing to file for bankruptcy. If your debt load has become so great that some of your debtors have found a way to garnish your wages, then this not only can put you in a difficult position for meeting your minimum obligations such as rent or food for your family but it also could put you in a bad position with your employer. You might file for bankruptcy to put an end to the garnishment.