Do I need to have a Certain Amount of Debt in Order to File a Bankruptcy?
By Michelle Howard
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.
Utah Bankruptcy Inc. are Utah's top experts on filing bankruptcy in Utah. If you have more questions about business bankruptcy filings please fill out the form to the left or give us a call at 385-269-9001 we are here to help.