If you are in a difficult financial situation, you may wonder if there are debt qualifications for bankruptcy. How much debt do you have to have in order to file Chapter 7 or Chapter 13? Andrade Law Office LLC can help you answer that question. Call us today for a confidential consultation.
How Much Debt Do I Have to Have to File Bankruptcy?
There is no specific amount of debt that you have to have to qualify for bankruptcy. The requirements of Chapter 7 and Chapter 13 do not include that you must have a minimum amount of debt. However, there are things you should consider before determining if bankruptcy is right for you, including:
- Are you able to repay your debts without filing bankruptcy?
- Will your creditors work with you to make payments on your debt?
- Can you discharge any or all of your debt?
A bankruptcy attorney will evaluate all of the facts of your individual case before helping you decide the best steps in your specific situation. Every case is different, and you should not make a decision about whether or not to file bankruptcy until you speak with a knowledgeable lawyer.
Maximum Debt Limits for Chapter 13 Bankruptcy
Although there is no minimum debt qualifications for bankruptcy, Chapter 13 does have maximum debt limits. You cannot have more than $1,257,850 in secured debt or $419,275 in unsecured debt. These amounts change periodically.
Chapter 7 does not have a minimum or maximum debt limit.
Can You Repay Debts Without Filing Bankruptcy?
One of the most important questions you should evaluate when determining if you should file bankruptcy is whether or not you have the ability to repay your debts without filing bankruptcy.
Bankruptcy will allow you to eliminate your debt through discharge or a structured payment plan. This can better manage your finances and give you the relief that you need to start fresh.
If you do not have the income to repay the debt that you have accumulated, then you should consider Chapter 7. Even if you have a steady income that might allow you to repay all or some of your debt, you should consider Chapter 13. With both types of bankruptcy it may be possible to discharge your debt.
Can You Negotiate with Creditors?
You should consider whether or not your creditors are willing to negotiate your debts. If they are, you may be able to:
- Settle your debts for less than you owe
- Reduce the amount you have to pay in principle and interest
- Use a payment plan to get caught up
If your creditors are not willing to negotiate, bankruptcy may give you some relief through discharge or a payment plan.
Can Bankruptcy Eliminate Debt?
If you file Chapter 7, most or all of your debt will likely be eliminated through discharge. You will also have to qualify for Chapter 7 through a Means Test that evaluates your income level.
If you file Chapter 13, your debt will be rolled into a three to five-year payment plan that will help you manage your debt. If you have debt left over at the end of your payment plan, it may be discharged.
However, there are certain types of debt that cannot be discharged, including lawsuit verdicts, tax debt, child support, alimony, student loans, and others. You should consult with an attorney to find out if your debt can be eliminated through bankruptcy.
Call Andrade Law Office LLC Today
Our skilled bankruptcy attorneys can help you understand debt qualifications for bankruptcy and whether you are eligible for Chapter 7 or Chapter 13. Call us today.