How Much Debt Do You Have to Be in to File for Bankruptcy in Florida?

If you are drowning in debt, you may be considering your options. Would a personal loan help you consolidate your debt? Could you get another job? How could you stop accumulating debt and earn more money to pay off what you owe?

As a last resort, many people choose bankruptcy. Bankruptcy is often the ideal option, but you may wonder about the requirements and limits. For example, how much debt do you have to have to file for bankruptcy?

There is no minimum amount of debt that you need to have. The U.S. Bankruptcy Code does not have a minimum debt amount, which means any debt is enough debt.

Filing for bankruptcy comes with some disadvantages, though. Your credit score could suffer for as long as a decade. Plus, it costs money to file for bankruptcy, as ironic as that may seem.

Anyone can file for bankruptcy, but you must assess whether it is the right tool to solve your problem. So, what is a good guideline?

Bankruptcy attorneys tend to have a six-month rule. Can you potentially pay off the debt you have in six months or less? If so, then you should not file for bankruptcy. You should work toward paying off that debt instead.

However, if you can foresee yourself still in massive debt in six months, or even worse off, then bankruptcy should be considered. But you also need to factor in the costs. The average cost of filing can range from $2,000 to $5,000 or more, depending on your state of residence as well as attorney costs. Because of this, many bankruptcy lawyers advise that you have at least $10,000 in dischargeable debt because any less would not be worth it once you account for all the legal fees.

Are There Limits for Debt?

How much debt can you discharge? Could you have millions of dollars worth? Technically, yes. To be eligible for Chapter 13 bankruptcy, you must have less than $2,750,000 in total debt. This includes debt secured by collateral (such as a home mortgage or auto loan) and unsecured debt (such as credit cards, medical bills, and personal loans). If you are eligible for Chapter 7 bankruptcy, there are no debt limits. This type of bankruptcy may allow for the elimination of all unsecured debts.

Contact Our West Palm Beach Bankruptcy Attorney Today

Bankruptcy can be a great thing for those who are struggling. While there is no minimum amount of debt you need to file, make sure you use this action wisely, as there are effects on your credit score to consider.

Do not attempt bankruptcy on your own. West Palm Beach bankruptcy attorney Brian K. McMahon, P.A. makes the bankruptcy filing process easy to understand and as stress-free as possible. Schedule a consultation by filling out the online form or calling (561) 658-1789. We serve the West Palm Beach, Boca Raton, Port St. Lucie, and South Florida areas.