How Much Debt Required Filing for Bankruptcy?

This is not a simple question as this has been asked many times to us in our law practice as well as email ( via phone calls and in direct meeting with the clients. Is there any minimum or maximum limit for debt to file for bankruptcy? A simple is NO. It all depends on your own psychological determination to handle it. The big question is how much you can afford to pay every month. Of course, you cannot pay more than what your income level is or what you can send every month minus your regular monthly expenses. Again, it also depends on your age. Let us summarize here to understand this question fully:
What is the size of the total debt? In addition, we need to divide debt into secured debts and unsecured debts. Secured debts are those debts, which has collateral attached with it. For instance, a home or an auto. If you do not pay, the secured creditors would come forward, confiscate the collateral, and file a deficiency judgment against you. To some, a $10,000 debt would be too much. To some, it is tolerable. However, we all know, anything exceeding $100,000 is too much, and if you are on forbearance, the interest rate keeps going. It is just a temporary umbrella where for the time being you are not paying.
– Bankruptcy might be helpful to you, as this would free your unsecured debts so that more funds will be available to you to address the student loan repayment.
– If you are younger, it is possible to pay more so that when you enter into more responsible period as when you marry and have children, it would become more difficult to make the student loans payments. It is also possible your spouse will have a student loan also.
– No need to have continuous forbearance all the time.
You probably can pay more if you get some big money like inheritance, annual allowance, or just big chunk of money from any of family source. Don’t waste it on some needless purchase. Pay toward your student loan.
– You should sit down and address this student loan issue. Continuously postponing and throwing student loan letters is no solution. Take the bull by the horn—yes, that should be the approach.


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