What is the minimum amount of debt required to file for bankruptcy?

A very common bankruptcy question concerns the minimum debt levels required to file a case.

There aren’t any.

The bankruptcy code has no formal cutoff points for filing a case under any chapter. Many folks are often confused about this because they have read about tough new requirements that Congress enacted in 2004 to try to make bankruptcy harder. Those requirements, however, deal with income levels, not debt levels.

Debt levels affect people differently, though, according to their life styles. Elderly people in particular sometimes file bankruptcy cases with what others might consider “small” amounts of debt, but if you are trying to survive on a fixed income in senior housing, there aren’t a lot of great reasons for suffering throughout the “golden years.” On the other hand, younger people just graduating from school often have a preponderance of student loan debts (which aren’t dischargeable anyway), a higher tolerance for risk, and more flexibility to take another job to “work it off.”

While there are no fixed minimums, curiously, Chapter 13 cases do have an upper debt limit, and you can be denied relief under this chapter just for being too much in the hole! Chapter 13 was originally intended as a “wage-earner’s” version of the Chapter 11 reorganizations troubled businesses use, and the maximum limits apparently try to serve to exclude large businesses from Chapter 13 filings.

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