No. There is no minimum amount of debt required for an individual to file a bankruptcy. The ability to pay back debt is completely relative. I may have a client whose debt only totals $4,000, but yet he has no source of income. I may also have a client whose debt totals $100,000. Yet the amount of time it may take each client to pay back their debt could be the same. The actual amount of debt is not the deciding factor as to whether you should consider bankruptcy.
What you should be looking at is the following.
- Is the debt something that can be repaid? – This is the first question that needs to be asked. A person needs to look at how much debt they have, how much they have to pay on this debt on a monthly basis and whether they will be able to make those payments until the debt is paid. If a person has the income to repay the debt, they may not need to file bankruptcy.
- How long will it be before the debt is repaid? – No one wants to live under the burden of debt for an indefinite period. If the debt can be repaid fairly quickly, bankruptcy may not help, but if it will take a long time to repay the debt, bankruptcy can help shorten the amount of time needed.
- Is Income being garnished? – If creditors have taken the step to garnish wages to repay a debt, bankruptcy can be the relief that is needed to stop the garnishment. In this case, the burden of the debt may be much worse than the stigma of bankruptcy.
These are the questions that one should ask themselves to help decide if bankruptcy is the right choice or they can talk to a bankruptcy professional to help give them the guidance they need to make the right decision.
If you have additional questions about business bankruptcy filing,s contact Robert Eder at 801-265-1836 for guidance.