Aurora, IL asked in Bankruptcy for Illinois

Q: How in debt do I need to be for it to be a good idea to file for bankruptcy?

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3 Lawyer Answers

Ray Choudhry

  • Bankruptcy Lawyer
  • Moline, IL
  • Licensed in Illinois

A: The test is inability to meet obligations in a timely manner.

For some people $5,000.00 is insurmountable debt based on current and projected earnings.

For others, $500,000.00 may not be much.

Timothy Denison agrees with this answer

Timothy Denison

  • Bankruptcy Lawyer
  • Louisville, KY

A: Far enugh that you cannot possibly pay them with your current income.

Jon Dowat

  • Bankruptcy Lawyer
  • Naperville, IL
  • Licensed in Illinois

A: Bankruptcy is a very powerful solution to problems with creditors. Regardless of who the creditors are, credit card companies, mortgage companies, car finance companies, the Internal Revenue Service, the Illinois Department of Revenue etc.

How much debt is enough debt? It depends if bankruptcy can relieve the financial pressure and stress that you are suffering then any amount of debt is appropriate for the bankruptcy.

In addition debtors will have to keep in the the basic COST/BENEFIT ratio of bankruptcy in minde to determine is bankruptcy is warranted.

If the bankruptcy costs you $2,500 and you are only discharging $5,000 of debt then don't do the bankruptcy. Conversely, If a friend will do your bankruptcy for $500 and you are discharging $5,000 in debt then do the bankruptcy!

In general if the debt is small and your income is small the problem is not your debt. The problem is your income. Look of a better paying job, get a second job, skip the bankruptcy and pay off the debt yourself.

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