There is no exact amount where it would be advisable for someone to file for bankruptcy or not to file a bankruptcy. The amount of the debt is not as important in deciding to file as the size of the burden from that debt. $10,000 might be an insurmountable mountain of debt for one person, whereas for another person it is merely a drop in the bucket for them.
Is There A Typical Amount For Clients To Have In Debts When They File?
Each person should sit down with an experienced bankruptcy attorney to go over their situation, because the amount of debt will vary. Remember that the amount of the debt is not as important in deciding to file as the size of the burden from that debt. Some have needed to file when their debt was in the tens of thousands and others have filed when their debts were in the millions.
Can Someone Have Too Much Debt To File A Normal Bankruptcy?
Each person should sit down with an experienced bankruptcy attorney to go over their situation, because the amount of debt will vary. A debt that went into the millions or come close would need to be considered carefully for the possible filing of a chapter 11 bankruptcy. In Chapter 11s there are higher limits regarding what debt can be included in the bankruptcy, because the person would not otherwise be able to file a Chapter 13 if they owed too much.
Is It Rare For Someone To Not Be Able To File A Chapter 7 Or A Chapter 13?
Yes, this would be a very rare situation, and it would typically come up if someone was heavily into investments and they overextended the stock because one property or the other has gone south and the market has not been too kind to them.
Do People Try To Game The System So They Can Move On Without Debt, Or Are There Legitimate Cases?
The majority of people who file for bankruptcy are honest people who need a fresh start because of their circumstances. It may be that they were going through some painful times because one of their family members was sick and they were just trying to stay on top of their bills, and then there are other people who have, through no fault of theirs, lost their job and do not have an income in order to stay on top of their bills any longer.
There are a handful of people who have difficulty managing their finances who have needed to file and have filed more than once. In the past, credit counseling and counseling on personal financial management was not required. But, they are now. So, we are now seeing greater awareness of the recurring problems of the past and are making people more cognizant of ways to plan, save, and spend responsibly.
For more information on How Much Debt Is Needed To File Bankruptcy, a free initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (714) 697-8600 today.