Filing For Bankruptcy in Minnesota Starts By Calling Walker & Walker
Many people across the globe are finding themselves under increasing pressure due to the amount of debt that is piling up. While many people may not have a huge amount of debt, the ability to pay everything back is becoming more improbable.
When people reach out to Walker & Walker Law Offices, PLLC for a bankruptcy consultation, there are various questions they will ask. One of the questions we hear often is “How much do you have to be in debt to file Chapter 7?”
Chapter 7 bankruptcy has been referred to by many as liquidation. Chapter 7 bankruptcy may allow you to get rid of many of your debts and wipe your slate clean, you will need to qualify for Chapter 7.
The truth is, there is no minimum amount of debt one will need in order to file Chapter 7. What you will need to do is exhibit an incapacity to pay your debts. When to file Chapter 7 and determining if this is the right step to take will depend on one’s circumstances.
The best test for whether you have enough debt for a bankruptcy to be worth it, is if you are living paycheck to paycheck for debt payments. If you have a calendar and know which day of the month everything is due on, then you are probably cutting things too close and should file bankruptcy. If you are thinking about selling your belongings to keep making payments, then it is time to talk with a bankruptcy attorney.
Surprisingly, the bankruptcy laws do not actually require a person to have any debt at all to file for bankruptcy. In general, however, it’s not worth the attorney’s fees and filing fee if you don’t have very much debt. At present, we recommend having at least $5,000 to $10,000 in debt before bankruptcy is worth. $5,000 of debt at 28% interest is very difficult to handle when you make only $20,000 per year, but if you are making $65,000 per year, then the $5,000 is manageable without bankruptcy.
Minimum Debt Needed To File Chapter 7
As mentioned above, there is no minimum amount required to file Chapter 7. The amount of debt you are in is a major factor when you want to determine if filing Chapter 7 will be a good option for you. However, it is also important to find out if filing Chapter 7 makes sense, and the answer can depend on the following:
- Your individual case and the facts surrounding it
- Whether you will be able to pay your debts without filing Chapter 7
- Whether you can clear specific debts you have
- Whether the companies you owe are willing to negotiate with you
Do I Qualify For Chapter 7?
One of the biggest factors that will be considered when determining your ability to repay your debts is your income. If your monthly income equals the monthly median income for your state, you could meet the qualifications for Chapter 7. On the other hand, if your monthly income is over the median monthly income, you can still qualify if your expendable income is not enough to repay what you owe.
There are some factors that will disqualify you from being able to file Chapter 7, and the factors are as follows:
- You have made attempts to deceive your creditors
- You have valuable things that aren’t protected in Chapter 7, such as rental properties or vacation homes.
- Your house, car, retirement accounts, and household items are protected and you get to keep them forever.
What Do I Need To File Chapter 7?
If you are considering filing for Chapter 7, you will need to file the proper forms. Your bankruptcy lawyer can prepare the forms for you. Your bankruptcy lawyer will also need to review your financial records, and these records can include the following:
- Pay stubs
- Bank statements
- Tax returns
- And a few other items and questions
The process of filing for Chapter 7 may seem complex and it can be difficult for many people to understand. We do not want you to become discouraged. Your debts can be wiped clean and you can be given a fresh start by filing Chapter 7. We understand how much stress and pressures can come with having debt and wanting to pay what you owe, but not being able to fulfill your obligations.
If you are wondering if you have enough debt to file for Chapter 7, chances are you do have enough. There is something that led to you asking this question. If you are stressed and tired of being buried in debt, if you are tired of choosing between paying your creditors or providing for your family, contact Walker & Walker Law Offices, PLLC today for a consultation.