How Much Debt Do I Need to Justify Filing Bankruptcy?

         At Halcomb Singler, LLP, I hear this question often from those seeking advice on whether to file bankruptcy.  There is no minimum amount of debt required by the bankruptcy code that an individual or couple must have to file for bankruptcy.  However, there have been several occasions that I have advised individuals not to file bankruptcy because it just didn't make sense considering the low amount of their debt.

         However, there is no simple number or formula for when it makes sense to file a bankruptcy.  The amount of debt is relative to the amount of income, the type of debt, and numerous other factors.  For example, I would advise an individual who had $50,000.00 in student loan debt who was in good health that there was no reason to file bankruptcy.  Even though $50,000.00 is a considerable amount of debt, the student loan debt is likely not dischargeable in bankruptcy.  On a similar note, I might advise an individual making about $80,000.00 with approximately $40,000.00 in credit card debt against filing bankruptcy if the individual had $2,000.00 of income left over each month after paying living expenses.  On the other hand, I have filed a bankruptcy petition for an individual making $260,000.00 per year with approximately $80,000.00 of unsecured debt.

        As you can tell, there are many factors which go into making the determination as to whether an individual or couple has enough debt to justify the filing of bankruptcy.  A bankruptcy will stay on your credit for 7 to 10 years.  It will make financing anything during that time a bit more difficult and you will certainly end up paying higher interest rates on anything financed.  However, if you don't have the ability to pay your creditors and sustain a minimal living for you and your family these downfalls may be less menacing.

       I am happy to meet with you at my Carmel, Indiana office if you have questions about whether it would make sense for you to file bankruptcy.  There is no fee for this consultation.  If you would like to sign up just enter your information on our contact page and you will be contacted for an appointment date and time.

Halcomb Singler, LLP, is a debt relief agency.  It helps people file for bankruptcy under the bankruptcy code.  No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so.  The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.