There is no debt amount minimum required to file for bankruptcy protection. You should simply have more debt that you can afford to repay. This is a subjective analysis that will vary greatly person to person. A debt load of $15,000.00 is a small inconvenience to some households and an overwhelming mountain to others. The basic question is whether the amount of outstanding debt impairs the household’s ability to function and maintain a reasonable standard of living.
The first step is a household budget. It is always a good idea to work out a written budget. Make sure your income is accurate and that you account for all of your expenses including vehicle maintenance, prescriptions and over the counter medications, home maintenance, property taxes and other expenses that may not be consistent every month.
Look at your income and living expenses to determine what, if anything, that you have available to service the debt. If you can buckle down and cut discretionary spending to repay the loans you probably do not need bankruptcy help.
If your debt is beyond your ability to pay in a reasonable manner or over a reasonable time, then you should consider bankruptcy to reduce or eliminate your debts and get a fresh start. It can be difficult to ask for help and the first appointment is always the most difficult for our clients. We regularly speak with clients who feel guilty, depressed, overwhelmed, frustrated and afraid.
If you are financially struggling it is prudent to discuss your options with an experienced attorney. Simply asking for information to determine where you stand will give you the tools to make an informed decision and effectively address the debt problem. A Google search is a poor substitute for a professional opinion. Our firm provides a free, confidential consultation to help you understand your options and make an educated decision.
We regularly advise clients to seek alternative strategies rather than bankruptcy if their circumstances are not significantly improved by seeking bankruptcy protection. The basic test is whether filing for bankruptcy makes you financially better off than you were before.
Alternatives include:
Obtaining additional income from a part-time job or a renter to fund debt payments,
Refinancing your home to pay off debt and absorb higher interest loans or credit cards into a single,
lower interest payment over an extended time;
Selling your home to use the proceeds to pay off debt;
Negotiating with individual creditors to satisfy the debts in a lump-sum, reduced payment; and
Simply allowing the debt to go unpaid while you seek sufficient income to fund your household.
Several of these options have limitations and negative consequences depending on your circumstances so it is always important to make sure you understand the total impact of any strategy. Bankruptcy is not a magical solution or a shameful act. It is a straightforward means to effectively deal with debt and get a fresh start. If your budget is beyond strained, ask for help for an experienced, local attorney and get detailed information to get control of your finances.
Please remember that these are basic answers to common questions and not legal advice. We can discuss your situation in detail during a free, confidential consultation with an attorney. Contact us today at www.meredithlawfirm.com to schedule an appointment at your convenience. We are a debt relief agency.