Filing for bankruptcy is one of the most challenging decisions anyone can make, and there are a variety of factors to consider. As unpaid bills pile up, some of the most common questions people ask are ‘how much debt justifies bankruptcy?’ and ‘is there a set amount of debt you need to file for chapter 7?’ Bankruptcy is complex, and it can be difficult to know what to do. If you’re considering filing for bankruptcy, the professionals at Sheppard Law Offices can help. We work with you to answer all of your bankruptcy questions and understand your options moving forward. Learn all about how much debt you need to file for Chapter 7 bankruptcy below.
How much debt do I need to file for chapter 7 bankruptcy?
Surprisingly, the answer is very straightforward– There is no minimum debt in order to file for chapter 7 bankruptcy. However, there are different factors that may affect your eligibility, and each case will depend on your unique individual circumstances.
When should I consider filing for bankruptcy?
While there is no single answer to when you should file for bankruptcy, the amount you owe is a deciding consideration. However, there are several other factors that may indicate that bankruptcy maybe your best option, such as:
- Are you struggling to repay your debts?
- Do you owe more than you take in per month?
- How willing are creditors to work with you?
- Do you have any other ways to pay back your debts?
While there is no minimum amount needed to file for bankruptcy, there is a ceiling for Chapter 13 debt relief. Currently, you are not allowed to have more than $419,275 of unsecured debt, and $1257,850 of secured debt.
Will filing for chapter 7 bankruptcy eliminate my debts?
Though hundreds of thousands of people file for bankruptcy every year, there are some common misconceptions that are surprisingly prevalent. Chief among them is the idea that filing for bankruptcy will wipe away all of an individual’s debt. Unfortunately, there are several types of debt that are nondischargeable, and will not be forgiven by filing for bankruptcy. These unforgivable debts include:
- Child support
- Student loans
- Debts incurred through fraud
- Court-appointed fines
- Some tax debts
How do I decide to file for chapter 7 bankruptcy?
Deciding to file for bankruptcy will have lasting legal and financial repercussions; however, the decision isn’t solely dependent on how much debt you owe. There are a variety of factors that you need to consider before making your final decision.
What type of debt do you owe?
If you primarily owe unsecured debt, bankruptcy is a good option. As there is no minimum amount to filing, bankruptcy can help you deal with unsecured debt such as medical bills, credit card debt, and payday loans.
If you’re behind on secured debt, bankruptcy can help you retain your assets while restructuring your debt into more manageable back payments. Secured debt includes car and house payments, and other debt that is backed by collateral.
Are you employed?
If you’re unemployed and struggling to keep up with payments, you’re likely eligible to file for bankruptcy to help you deal with your unsecured debts. This will allow you to start focusing on secured debts so you can keep your assets.
Can you pay your bankruptcy court costs?
In order to file for chapter 7 bankruptcy, you need to do so in court, which means there will be attorney fees, filing fees, and education course fees. Ironically, some court costs can be waived when filing for bankruptcy in limited circumstances. Fortunately, these fees and costs are minimal when compared to the amount of money many people owe on their debts when they file for bankruptcy.
Filing for chapter 7 bankruptcy in Columbus
If you’re considering filing for bankruptcy in Columbus, the professionals at Sheppard Law Office can help. Our bankruptcy attorneys work with you to help determine exactly what type of bankruptcy you need to file, what type of debt you owe, and the best way to get your finances back on track. Contact our Columbus bankruptcy lawyers today for a free consultation and learn about how we can help you get out of debt.