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How Much Debt Do I Need To Have To File Bankruptcy?

  • By: Christopher Benson
  • Published: December 23, 2014

Debt is a relative term. If you can’t keep up with the bills you currently have, then bankruptcy is always an option to get things under control.

Eligibility for bankruptcy relief has less to do with how much debt you owe and more to do with your own income and the median income where you live. If you make very little compared to the majority of people where you live, it’s likely that you will qualify for bankruptcy. Each state has it’s own Bankruptcy eligibility is determined by the Means Test. The means test qualifies your debt based on your location, how many are in your household, and your expense-to-income ratio. If you fail the means test, you can’t file for Chapter 7 bankruptcy, but you may still be eligible for Chapter 13 bankruptcy.

Some debts will not qualify for dismissal no matter how little you make or how much you owe. These include:

Support obligations, including child support and alimony

  • Tax debt
  • Debt incurred by fraud
  • Debt related to drunk driving
  • Student loans

Rather than worrying about how much debt you have, evaluate the urgency of the need to pay back the debt you currently have, big or small. The decision to file for bankruptcy is more urgent if you have creditors suing you, garnishing wages, foreclosing on your property, or trying to repossess assets.

Over the past 23 years, the Law Offices of Christopher A. Benson has helped over 2,300 of Washington clients take control of their financial situation. We can stop your garnishment and change your monthly payments for all your combined unsecured debt, and if you have had more than $600 garnished within the last 90 days, we can get all of the money back in most cases. But you have to act quickly–call (253) 815-6940 for your free consultation, or email us today. Evening and weekend appointments available.

Christopher Benson

About the Author Chris served on the Board of Directors for Habitat for Humanity
Seattle/S. King County for 10 years and served as Vice President
of the organization during part of that time. Read More