Debt Limits In Bankruptcy

: Chris Lee Law Firm

  Filed under: Bankruptcy

There is a range of income and debt levels in Dallas bankruptcy cases. In fact, no two bankruptcy cases are alike. This is because each person’s financial situation is different. Luckily, filing for bankruptcy can offer protection for just about any level of debt.

Considerations

The most influential factor in a bankruptcy case is your income. Income levels help determine how much you will be required to repay creditors, if any. Income makes the biggest impact in bankruptcy eligibility for Chapter 7 cases, in which you must have an income less than the median income level of your state to qualify. If your income is greater than the median income level of the state, you may not qualify for Chapter 7.  In most cases, there is maximum amount of debt that would disqualify you from a Chapter 7 case; rather, it is the overall debt-to-income ratio that is important. In other words, you need to have enough debt but there really isn’t a specified amount that qualifies as “too much” debt.

Generally, income levels do not disqualify people from filing Chapter 13, but could influence the amount of money they are required to pay as part of their debtor’s plan. On the other hand, debt levels are somewhat regulated in a Chapter 13 filing. Federal bankruptcy laws state that you may not owe more than $250,000 in unsecured debt and no more than $750,000 in secured debt in order to qualify for Chapter 13. These restrictions apply to persons of average, or median, income levels.


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