Do You Have Enough Debt To File Bankruptcy?

How much debt do I have to have in order to file for bankruptcy? 

I get asked this question, or some iteration of it, several times a week.  There is no specific dollar amount of debt needed in order to file for bankruptcy.  If the debt you have is too much for you to pay and still be able to provide for you and your family, then you have too much debt.  There are some signs to look for if you think you have too much debt.

• Are your credit cards at or near their maximum balance?
• Are you just paying the minimum payment on your credit cards?
• Are you behind on your rent/mortgage, car or student loan?
• Are you behind on utility bills?
• Do you have high interest personal loans and/or check advances?
• Are you receiving calls from debt collector?
• After paying your bills, do you and your family do not have enough money for normal necessities?

If any or all of these apply to your situation, then you probably have more debt than you can handle.  While this doesn’t necessarily mean that you should file bankruptcy, it does mean that you should thoroughly evaluate your financial situation and attempt to understand and correct what is causing the financial problem.  I would, however, caution you to avoid Debt Settlement companies.  These are companies that claim they can solve your financial problems “without having to file bankruptcy” by using “secret programs that the credit card companies don’t want you to know about”.  The fact is, these companies have less than a 10% rate of success and are finally starting to be held accountable for their misrepresentation.  Read some wonderful articles by our attorneys and staff regarding Debt Settlement companies, including the criminal indictment of a prominent debt settlement company for misrepresentation here and here.

One of the best things a person can do in this type of situation, however, is to meet with a good and reputable bankruptcy attorney.  There are several reasons to meet with a bankruptcy attorney if you find yourself in situation similar to the one described above.  First, the initial consultation is almost always free (and it’s always free at Bond & Botes).  This is important because money is already tight and the last thing you can afford is to pay someone hundreds of dollars or more to evaluate your financial situation.  Meeting with a bankruptcy attorney allows you the opportunity to have a professional familiar with debt and financial problems evaluate your individual situation and determine the best course of action.  And contrary to popular belief, meeting with a bankruptcy attorney does not mean you have to file bankruptcy.

I see people every day that are struggling financially that do not need to file bankruptcy.  They simply need some good advice and guidance as to what they need to do in order to get their situation under control.  Second, meeting with a bankruptcy attorney will enable you to understand your rights and the rights of the people trying to collect the debt from you.  This is extremely important for several reasons.  One, you have rights and you need to know what they are.  A qualified bankruptcy attorney will advise you of your rights.  If you are unable to pay your debts, there are things that debt collectors can and cannot do in order to collect their debt.  Without knowing your rights, you are at the mercy of people who may not have you and your family’s best interest in mind.   Second, there are things that you can do and there are things that you cannot do if you are unable to pay your debts.  Without knowing what you should or shouldn’t do, you may unknowingly harm yourself or hurt your chances for debt relief.  A third reason to meet with a bankruptcy attorney is that he or she is on YOUR side.  At a time when it may feel like everybody is against you, it is very comforting to know that you have someone that is looking out for you and your family’s best interest.  The people you owe money to have specialists and attorneys helping them and you should as well.

If you are feeling overwhelmed by your financial situation or just want to speak with someone before things get out of control, I encourage you to contact an Bond and Botes law office and schedule a free, no obligation consultation.  When you need someone to look out for you and your families best interest, we will be there for you.