Do I Have to Have a Minimum Debt to File for Bankruptcy?

February 21, 2019

Sometimes people call our office because they are concerned about their financial picture. They can’t work, their medical bills are piling up, and they worry about taking care of themselves and their family. We can help sort some of that out. Sometimes people have questions about bankruptcy. We hope this information is helpful. If you are worried about your finances after an injury, contact us to see if we can help before you consider bankruptcy.


If you are experiencing difficulty paying off your debts and are looking into bankruptcy, you may be wondering if your debt is bad enough to consider filing. Whether or not you decide that bankruptcy is the correct decision for you will depend on your unique and individual circumstances. Bankruptcy laws do not require the person filing (otherwise known as the debtor) to have a certain amount of debt in order to be eligible for bankruptcy relief.

How much debt you have is definitely an important thing to consider when determining whether filing for bankruptcy is in your best interest, but laws do not require you to have a minimum debt. More important to consider are these factors:

Will you be able to discharge the types of debt you have in bankruptcy?

If you are looking to file, keep in mind that there are limits on how often you can receive a bankruptcy discharge. If you do not have a lot of debt, you should keep in mind that it may be a smart idea to wait to file until you really need it.

Are you able to repay your debts outside of bankruptcy?

Filing for bankruptcy can affect your credit for years to come. Before you decide to file for bankruptcy without doing your homework, you should consider whether or not you can afford or manage to repay your debts without bankruptcy. If you are earning a steady income, it could be possible for you to work with someone to pay down your debts rather than resorting to bankruptcy. A credit counselor, for example, can help you to evaluate your situation and help you come up with a manageable plan for paying off your debts through a debt management plan. Just make sure that you go to a credit counselor from a U.S. Trustee approved agency so that you do not fall victim to a scam.

Are your creditors willing to work with you?

You may not have to file for bankruptcy if you can work something out with the creditors to whom you owe money. In some cases, creditors will help you to cure your default rather than sinking further into a hole of debt. If you can manage to negotiate with them, you may be able to settle the debts that you owe them for less than the amount you owe, reduce your interest rate, use a payment plan to catch up, reduce your principal balance.

While there are no minimum debts for bankruptcy, when you file for Chapter 13 bankruptcy, there is a cap on the maximum debt one can have. You cannot have more than $1,194,200 in secured debt or $394,725 in unsecured debt. These numbers change to reflect inflation.

When Should You Consider Bankruptcy

If you are unable to or cannot afford to pay back your debts and, as a result, are being sued by creditors, having your wages garnished by creditors, or potentially risking your property being foreclosed on or repossessed, it may be beneficial to consider bankruptcy.

Regardless of the amount of debt that you are currently carrying, it is important for you to understand your options when it comes to filing for bankruptcy. A bankruptcy lawyer knows that it can be overwhelming to have both a seemingly insurmountable amount of debt and to make the decision to file for bankruptcy. That is why they are dedicated to helping their clients understand their options so that, when they move forward they can feel comfortable making their next steps with a clean slate.

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