How Much Debt is Enough to File for Bankruptcy?

Anyone who is struggling with debt can feel overwhelmed, whether they owe $10,000 or $100,000 to creditors. Yet the total amount of debt you owe can determine whether personal bankruptcy is the right decision for you and whether it is the right decision to make currently. There are other factors to consider, including your income and assets and your employment prospects for the future, which could allow you to begin repaying some of the debt you owe. These issues can be complicated, and you should not make the decision to file for consumer bankruptcy until you have spoken with an experienced bankruptcy lawyer in Oak Park who can help you to assess your circumstances and to weigh the pros and cons of a bankruptcy filing. In the meantime, we know you might be wondering: how much debt is enough to file for bankruptcy? There is no specific number, but our firm can give you some things to consider.

There is No Specific Debt Amount to Trigger a Personal Bankruptcy Filing

You should know that there is no specific amount of consumer debt that should necessarily trigger a bankruptcy filing or that should lead a particular person to file for bankruptcy under U.S. bankruptcy law. Decisions about filing for bankruptcy should always be made on an individual, case-by-case basis. Accordingly, struggling with $20,000 of debt might be sufficient reason for one person to file for bankruptcy, while another person might only be considering bankruptcy as a result of owing significantly more debt.

At the same time, owing smaller amounts of debt may be a reason to rethink or reconsider bankruptcy. For example, if you owe $10,000 in debt and can reach an agreement with a creditor to pay small amounts over time without significant interest or an agreement with a creditor where a portion of the debt is forgiven, filing for bankruptcy may not be the most logical route for you. Yet again, if you are unemployed and do not have prospects for a steady income in the future, $10,000 in debt could be a reason to consider a Chapter 7 bankruptcy filing.

Consider the Pros and Cons

In order to determine whether the amount of debt you owe is enough to begin thinking about a Chapter 7 or Chapter 13 bankruptcy filing, you should work with an Oak Park bankruptcy lawyer to consider the pros and cons of the bankruptcy filing and what options may be available to you. Questions you might consider asking yourself include, for example:

  • Will you be able to repay any portion of this debt in the near future with your earnings?
  • Do you have assets that are important to you that will not be exempt if you file for Chapter 7 bankruptcy?
  • Do you owe the debt to one creditor or multiple creditors?
  • Will the creditor consider settling the debt or negotiating the amount you owe?
  • Do you have options for repaying some of the debt now, such as selling certain assets or borrowing money from a family member who will not charge interest?
  • Have you considered the consequences of bankruptcy, especially if you are considering a mortgage in the near future?

Beyond the sheer amount of debt, the type of debt you owe should also be a consideration when you are thinking about bankruptcy.

Contact a Bankruptcy Attorney in Oak Park Today

Do you want to discuss the possibility of bankruptcy? One of our experienced Oak Park bankruptcy lawyers can answer any questions and provide you with more information about consumer bankruptcy. Contact the Emerson Law Firm today.



See Related Blog Posts:

Bankruptcy Around the Holidays: What Should I Consider?

Debt Collectors and Debts Discharged in Bankruptcy: Five Things to Know

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