The bankruptcy code places no minimum amount of debt required to file for Chapter 7 or Chapter 13 bankruptcy. When considering whether or not to file it is important not to pay attention only to the total debt figures, but also consider the debtor’s ability to repay the debt versus the potential benefits of bankruptcy, such as the automatic stay (which can prevent further collection action, stops lawsuits, halts foreclosure and can prevent repossession). In addition, in some cases, bankruptcy may successfully protect someone who owes unliquidated or contested debts – even if those debts have not been ultimately reduced to a dollar figure.
Chapter 13 places certain restrictions on the amount of debt that can be discharged. Under the current limits, a Chapter 13 bankruptcy will be dismissed if the debtor has unsecured debt greater than $360,474 and/or secured debt greater than $1,081,400 (as of April 1, 2010).
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