There comes a point where filing for bankruptcy makes sense. However, many people are unsure of where that point is until they have crossed it. Choosing to file for bankruptcy depends on your situation and should be dictated by your needs. If you are asking, “How much debt should I have to file for bankruptcy?”, then here is an answer from the bankruptcy attorneys at Kain + Henehan.
Minimum Debt for Bankruptcy
There isn’t a minimum debt for bankruptcy. You can file at any point with any amount of debt. However, that may not be the best way to handle your financial situation. It all depends on what your specific situation is and what other options are available to you. Here are a few guidelines to help you decide how much debt you have to file for bankruptcy.
Your Debt is Unmanageable
There is a point where your debt is either so large, so complicated, or so predatory that it becomes unmanageable. You’ll struggle to make payments if you can make payments at all. No matter what you do, you won’t be able to get control of your debt and find a way to work your way out. At that point, bankruptcy can be an effective way to turn the tide in your favor.
Your Debt Can Never Be Repaid
You may find yourself in so much debt that you cannot repay it with your income and investments. This can happen in several ways, including just acquiring too much debt over time. In some cases, the debt that you acquire can accrue at a rate that makes it impossible to pay back, where it grows faster than you can make payments. Declaring bankruptcy can put a dent in those debts and stop them from growing so large that they crush you financially.
You Are At Risk of Losing Everything
As your debt increases, lenders may repossess certain assets like your house or car. When you can’t make payments and your lenders are rushing to get anything that they can back from you, it may be time to file for bankruptcy. Doing so pauses all of their collection efforts. They can’t repossess anything or try to take money from you unless the court explicitly says that they can. Otherwise, all of their claims have to be assessed in court.
There Are No Other Options Left
When you are in debt for a while and looking for a way out, there are a few options that you can try. However, those options are not guaranteed to work. When all of your other options have failed, consider filing for bankruptcy.
It is possible to file for at least one type of bankruptcy in most cases. Which type depends on your circumstances. Bankruptcy can give you a clean slate financially if you complete the process.
The Key is Getting the Right Help
Bankruptcy can seem like an overwhelming option, but it can provide the financial relief that you need. The key to making it work is to work with the right attorney. Kain + Henehan are leading bankruptcy attorneys in St. Cloud. Contact Kain + Henehan by calling (612) 438-8006 or filling out the online form.
