It’s a very common question in the bankruptcy field, “How much debt do you need to file bankruptcy?” The short answer is that there is no minimum. Actually, there are maximum amounts depending on the type of bankruptcy you want to file. Let’s take a look at the rules to find out which form of bankruptcy best suits your situation; Chapter 7 bankruptcy, or Chapter 13 bankruptcy.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy has no minimum limits and no maximum. With Chapter 7 you can discharge most or even all of your debt in some cases within a few months.
Many people are afraid that if they file Chapter 7 bankruptcy, a bankruptcy trustee will come and take everything they ever owned, including their home, cars, clothes, and even food. That is often completely untrue since Chapter 7 bankruptcy offers a wide variety of generous exemptions that allow most people that file to keep everything while offloading much of their financial burdens.
Chapter 13 Bankruptcy
Chapter 13 is best for people who have a regular source of income. Chapter 13 bankruptcy allows people to set up a payment plan to eliminate as much of their debt as possible, typically within three to five years. After that time, the remaining debt is often discharged.
There is no minimum amount of debt required to file, but there is a maximum. Those with more than $1,149,525 in secured debt and $383,175 in unsecured debt will be ineligible to file Chapter 13 bankruptcy.
Is Bankruptcy Right for You?
If you are asking what the minimum amount of debt is required to file bankruptcy, make sure that bankruptcy really is the right solution for you. If repaying the debt is possible without filing for Chapter 7 or Chapter 13 bankruptcy, then you may be better off pursuing that option.
If you are unsure of whether or not you should file bankruptcy, we advise that you take advantage of our free consultation. We can review your case and help you make an informed decision that is best for your future, whether it’s bankruptcy or another solution.
Garland & Mason, LLC Monmouth County bankruptcy attorneys are proud to serve anyone suffering financially in Manalapan and the surrounding area.