Is There a Minimum Amount of Debt Needed to File for Bankruptcy?

St. Clair County, AL–If you’ve fallen into debt and are considering filing for bankruptcy, rest assured you aren’t alone. With the average consumer debt (i.e. payday loans, credit card debt, student loans, etc.) currently set at around $23,325, it’s no surprise why several people are seeking relief from the debt they’ve accrued over the years (1).

If bankruptcy is something you think might serve as a way to get your debt under control, you might be wondering whether there is a minimum amount of debt needed to file.

Under U.S. bankruptcy code, there isn’t a minimum amount of debt needed to file for bankruptcy.

When it comes to debt, there isn’t a minimum amount you need in order to qualify for bankruptcy. You will, however, be expected to meet income requirements and be willing to disclose all of your debts and assets. This means you can have as little as $20,000 of accrued debt or as much as $100,000 (or more).

If you meet all the requirements necessary to file for bankruptcy, the court will review your assets and debts and determine what can and cannot be discharged. A discharged debt is one that is wiped off your record. Not only does this mean that you won’t be required to pay the money back but also that the creditor can no longer pursue you for the unpaid money.

What types of debt qualify for discharge under Chapter 7 bankruptcy?

Chapter 7 bankruptcy is one of the more common types of bankruptcy individuals file for when they are looking to “erase” their debt and start fresh. With this type of bankruptcy, a bankruptcy trustee will liquidate any assets you have that are non-exempt and use the proceeds to pay down some of the money you owe.

If there is any leftover debt, the court may or may not discharge it. Typically, if the debt includes payday loans, medical debt, credit card debt, auto loans, etc., it may qualify for discharge. However, if any of the leftover debt consists of tax liabilities, child support, alimony, or certain types of student loans, you’ll likely still be liable for satisfying the debt.

A St. Clair County, AL bankruptcy attorney can help you weigh your options after you’ve fallen deep into debt.

Bankruptcy is one solution that can be used to get you out of debt. However, there are different types you can file for. To gain a better understanding of how the bankruptcy process works and which type is best for you to file for, it’s a good idea to sit down with an experienced bankruptcy lawyer in St. Clair County to discuss this.

Hill, Gossett, Kemp & Hufford, P.C. is a bankruptcy law firm located in Alabama that offers both legal advice and representation. If you’d like to schedule a time to speak with a bankruptcy lawyer regarding your current financial situation, contact Hill, Gossett, Kemp & Hufford, P.C. at one of their office locations listed down below.

Have questions about this article or a legal concern? Call 800-672-3103.

Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.

Hill, Gossett, Kemp & Hufford, P.C. can be reached at:

Moody Office

2603 Moody Parkway, Suite 200

Moody, Alabama 35004

Phone: (205) 640-2000

Website: www.hwhlawgroup.com

Leeds Office

7900 Parkway Drive

Leeds, AL 35094

Phone: (205) 699-5500

Springville Office

6441 U.S. Highway 11