Legally no. There is no legal requirement that you must have so much debt before you qualify for a Chapter 7 Bankruptcy. In theory, you could file Chapter 7 Bankruptcy on $500.00 in debt. Now, you wouldn’t do this because it wouldn’t make any sense.
We do see people who possess a modest amount of debt. What is a modest amount of debt? I think 5k or less is a modest amount of debt. Most of us would not file Chapter 7 Bankruptcy on this amount of debt. However, everything is relative. What if I told you, you now earn $600.00 per month in Social Security Disability and you have one credit card debt for 5k? The credit card company sold the debt to ABC collection agency and ABC collection agency is REALLY aggressive. They call you day and night. They call your relatives and friends too. What if I told you they froze your bank account?
Now, the reality is the creditor likely will not be able to collect anything from you but can you live with your account frozen and your checks bouncing and no access to your money for 3-4 weeks? Most of us could not and would not want to either.
Do you get where we are going with this? Yes, to most of us, 5k is not enough money to file Chapter 7 Bankruptcy on. But, if you are limited to $600.00 per month in Social Security Disability income, 5k might as well be a million dollars. Sometimes, it is worth getting rid of a headache for people than to watch them suffer at the hands of one overly aggressive creditor.
When the time is right, or when you are ready, reach out to Minnesota’s HIGHEST Google reviewed bankruptcy law firm at www.kainscott.com. You will be so glad you did!