Is There a Minimum Debt Requirement to File for Personal Bankruptcy?
Are you currently considering a personal bankruptcy case but concerned that you may not be eligible because you do not have enough debt? In other words, are you trying to find out whether there is a minimum debt requirement to file for personal bankruptcy? This is a question that some debtors have, especially when they begin discussing their circumstances with friends or family members who have filed for personal bankruptcy in the past, and who may have had significantly more debt than what the debtor currently has.
In short, there is no minimum debt requirement to file for personal bankruptcy under any chapter, but there are debt limit requirements if you are considering Chapter 13 bankruptcy. Our South Florida bankruptcy lawyers can explain in more detail.
No Minimum Debt Requirements for Personal Bankruptcy Filings
The United States Bankruptcy Code has no minimum debt requirements that a debtor must meet in order to file for personal bankruptcy under any chapter. Accordingly, you do not have to meet a minimum debt requirement whether you are considering a consumer filing under Chapter 7, Chapter 13, or Chapter 11.
Whether you should file for bankruptcy — or consider another option instead — based on the amount of debt you have, especially if it is relatively little debt, is something you should discuss with a bankruptcy lawyer who can assist you.
High Debt Thresholds for Chapter 13 Bankruptcy
Although there is no minimum debt limit, there is a maximum debt limit for a personal bankruptcy filing under Chapter 13. Currently — and this number typically adjusts with inflation every three years — the maximum amount of debt for an individual Chapter 13 bankruptcy filing is $526,700 in unsecured debt and $1,580,125 in secured debt. You cannot mix and match, and you cannot add unsecured debt with secured debt to consider total debt. You must be below the specific threshold amounts for unsecured and secured debts identified.
If you are ineligible for Chapter 13 bankruptcy because you have too much debt, you can still file for Chapter 11 bankruptcy, which is a similar type of reorganization bankruptcy. You can also consider a liquidation bankruptcy under Chapter 7. Your bankruptcy attorney also may be able to discuss options with you, depending on your debt amount, to lower certain debts in order to become eligible for Chapter 13.
Contact Our West Palm Beach Bankruptcy Lawyers for Assistance with Your Personal Bankruptcy Eligibility and Filing in South Florida
For anyone who is currently considering a personal bankruptcy filing and concerns about eligibility based on their amount of debt, it is important to know, as we discussed above, that there is no minimum debt requirement to file for any type of personal bankruptcy. Whether you have a relatively small amount of debt compared with other debtors you know who have filed for bankruptcy, or more debt than others you know, there is no minimum. There is, however, as we noted, a debt ceiling for Chapter 13 bankruptcy cases (though not for personal Chapter 7 cases). To find out more about your eligibility for Chapter 7 or Chapter 13 bankruptcy based on your debt and other factors, you should contact one of the experienced West Palm Beach bankruptcy attorneys at Kelley Kaplan Delaney & Eller, PLLC today.
Source:
uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics
