The short answer is it does not matter. If you are filing chapter 7 bankruptcy there is no minimum or maximum amount of debt you are allowed to have. I have helped people through chapter 7 bankruptcies with over a million dollars in debt and I have helped others with just under eight thousand dollars debt. While the debt amount itself is important in making the personal decision whether to file or not, the deciding factor will be whether you are making enough money to keep the debt under control.
For instance the person with the million dollar debt was managing his debt, but lost his job and the housing market tumbled causing his home to lose significant value. He was not able to make any of his payments. On the other side of the spectrum the young man with the eight thousand dollar debt, had been out of work for a significant period of time. When he finally did get a job, it provided a very modest income, but not enough to satisfy his creditors.
As much as he tried to work with his creditors they would not listen and they eventually started garnishing his wages. In both instances, bankruptcy was the only option to protect these individuals. As far as qualifying for bankruptcy, the debt amount was insignificant – but according to personal circumstances, each person has a different threshold.
Chapter 13 is a little bit different in that there is a maximum threshold for the amount of debt you may have. The maximum amount of debt an individual may have and still qualify for a chapter 13 is $1,081,000.00 in secured debt and $361,000.00 in unsecured debt. So long as the debt amounts are below these two thresholds, you are eligible to file.
If you have questions about whether bankruptcy is the right solution for you and would like to schedule a FREE consultation, call today. Call experienced Arizona Bankruptcy Attorney, Benjamin Skinner at JacksonWhite (480)648)-8975