There is no minimum amount of debt required in order for you to file for bankruptcy. Everyone's case is different.
If you file, your ability to pay back your creditors highly depends on your percentage of living expenses. For example, if you are unable to work, you will only pay back a small amount of your debt.
If you have a small amount of debt, consider these five factors before filing:
- How much do you owe? You may be able to work out new payment plans with your bank. Speak with an employee to look at your options. Bankruptcy will stay on your credit for 7-10 years, and if your amount of debt could be paid off with a new payment plan, this will not damage your credit score.
- Will bankruptcy eliminate the debt you owe? (Ex.: You cannot file for bankruptcy for student loans.)
- How long will repaying your debt take you?
- Do you owe a collection agency?
- How much will you spend in attorney and filing fees? Will those factors make filing for bankruptcy worth it?