Many people wonder if they qualify to file bankruptcy. They know that they are in financial trouble. They know that they cannot pay all of their bills. Their income may have dropped due to job loss or illness. Bankruptcy is an option they are considering. Do they qualify to file, and if so what will the bankruptcy do for them?
There is no minimum amount of debt that is required to qualify to file bankruptcy. Our office has filed individuals who owe less than $5,000. And, we have filed bankruptcy for those who owe more than $1 million dollars. In both cases, the individual involved needed to file the bankruptcy. What may be impossible for one person to pay might be very possible for another individual.
There are limits on what you can owe in a Chapter 13 bankruptcy. Most consumers do not have a problem with these limits. There is no such limitation in a Chapter 7. However, if you have the ability to pay all or some of your debt, then the law will probably only qualify you for a Chapter 13. This is actually good news for the consumer, because the ability to pay some of your debt much better than having no ability to pay anything at all.
Other factors to consider if you are qualified to file bankruptcy is whether or not you have filed a previous bankruptcy. If you have filed a Chapter 7 in the previous eight years, and received a discharge in that case, then you are not qualified to file another chapter 7. The waiting time between Chapter 7 cases is eight years.
This does not mean, however, that you are out of luck if you need to file bankruptcy and have filed a Chapter 7 within the last eight years. You may file a Chapter 13 and get a discharge if you have filed no previous bankruptcy and received a discharge within the last four years. In Chapter 13, you pay back only 1% to 100% of your unsecured debt. Therefore, a Chapter 13 actually may be almost identical in its result as if you had filed a Chapter 7.