If you’re preparing to file for bankruptcy, it’s important to understand the limitations before entering into the process. Bankruptcy is an extremely beneficial tool for those struggling with debt, even with a high income. Despite its effect on your financial credit rating, bankruptcy is an effective solution for immediate financial recovery and long-term stability for an individual consumer or business. The requirements of bankruptcy are strict in order to prevent abuse, but with the help and protection of Behm Law Group, Ltd. attorneys, you can successfully file for bankruptcy in Worthington, MN.
Because most individuals and small businesses that file for bankruptcy don’t have the legal knowledge of a trained attorney or a team of lawyers a larger company might have to help them through the process, it’s critical to take advantage of professional assistance in the form of a bankruptcy attorney. Behm attorneys are highly knowledgeable and capable of working through your case for a positive outcome as well as protecting you from creditor harassment and advising and educating you along the way.
One common concern we hear from our clients is about debt amounts when entering the bankruptcy process. Some of our clients worry they may have too little debt to file, while others face the opposite. When it comes to minimum and maximum debt limits, the requirements are, fortunately, quite straightforward.
Minimum Debt
There is no court-set limit on the minimum amount of debt you need to file for bankruptcy. You may have limits on your income if you plan on filing for Chapter 7 bankruptcy, but all filers must pass the Means Test, which will determine your eligibility. The only limits on a minimum debt will be put in place by your own judgment. If you have a debt amount so low that it doesn’t justify bankruptcy and attorney costs, you may want to resolve your debts another way. Additionally, if you have high debts but they are excepted from the bankruptcy discharge, you won’t gain much from a case. High credit card debts, medical bills, mortgages, and car loans are all common debts that will be relieved in the bankruptcy process and will certainly justify a case even if they’re as low as $5,000.
Maximum Debt
The U.S. Bankruptcy Court does set a maximum limit on the debt amounts that can be resolved in a bankruptcy case. These limits are very high, but occasionally we see clients that struggle with this compromise. For a Chapter 13 case, this maximum amount currently stands at $1,184,200 for secured debts and $394,725 for unsecured debts. Chapter 7 doesn’t have a current maximum debt limit, but again, you must pass the Means Test to be eligible for a petition.
Find Expert Help When You File for Bankruptcy
If you have debts you would like to resolve through bankruptcy and want to learn more about your eligibility and the process as a whole, contact Behm Law Group, Ltd. today at (507) 387-7200 for more information about filing for bankruptcy in Worthington, MN.
