By: San Francisco bankruptcy attorney, Jeena Cho
Potential clients frequently ask me “What is the Minimum Debt to File Chapter 7 Bankruptcy?” My answer is, “it depends.” A $10,000 credit card debt may be manageable to one client, but overwhelming for another. In helping clients decide if bankruptcy is a good option for him or her, I ask them to consider the following.
- What’s your exit strategy? In another words, how are you going to pay off your debt? Too often, clients get stuck simply making minimum payments and spinning their wheels, not finding an exit strategy. Meanwhile, they throw away money on payments on debt that would otherwise be discharged in bankruptcy.
- Are you at a point where you can live without credit? If the client is still at a stage where he/she needs continuing credit, or is not in a position where he can stop accumulating more debt, time is not ripe for filing for bankruptcy. For instance, if a client has ongoing necessary medical treatment where he will continue to accumulate more debt, it’s not an ideal time to file.
There is no magical answer to the question “What is the Minimum Debt to File Chapter 7 Bankruptcy?” There is no law requiring you to have maximum or minimum amount of debt for Chapter 7 (there is maximum debt limit for Chapter 13). Some other factors you may want to consider in deciding whether to file for bankruptcy: Should I file?
Do you have questions? Come in for a consultation. Contact us.
