David M. Siegel answers in 36 seconds. Watch on YouTube · Read the transcript.
Short answer: There is no minimum amount. What matters is your situation, not a number. Someone on Social Security or a fixed income can be buried by a balance a working household would manage. And if someone is employed without much debt, we are not likely to recommend filing at all.
No threshold exists
The Bankruptcy Code sets no minimum. Nobody is turned away for owing too little. The question is never whether the number is large enough, but whether the debt is realistically payable out of the income you have.
Which means the same balance produces opposite answers for different people, and any advice built on a dollar figure alone is worthless.
Why a fixed income changes everything
Someone on Social Security has income that will not grow. There is no promotion coming and no overtime available. Twelve thousand dollars of credit card debt against a fixed monthly benefit can be genuinely unpayable — the minimums consume what was meant for food and prescriptions, and the balance never moves.
That is a real case, and the size of it has nothing to do with whether filing is the right answer.
And why we sometimes say no
The reverse happens too. Someone gainfully employed with a manageable balance and room in the budget generally should not file. We will say so.
That is what a consultation is for. Part of the job is telling people they do not need this — sometimes the answer is a budget change, a negotiation with one creditor, or simply waiting to see how the next few months go.
A more useful question than the balance
Instead of asking how much you owe, ask how long it would take to clear it at what you are currently paying. If the answer is three years, you have a plan. If the answer is never, the balance is beside the point.
That calculation, plus an honest look at whether income is likely to rise, does more to answer the question than any threshold could.
Not sure your situation is bad enough to bother?
The consultation is free and there is no obligation. You will find out what you qualify for, which debts can be eliminated, what it costs, and what the payment plan looks like.
Wheeling: (847) 520-8100 Chicago: (773) 276-6969
Your case is handled by phone — you do not need to come into either office. Even the meeting of creditors is held on Zoom. We represent clients across the Northern District of Illinois: Cook, DuPage, Grundy, Kane, Kendall, Lake, LaSalle and Will counties.
Full transcript of the video
how much debt is enough to file well it really depends on the particular case for somebody who is on Social Security or a fixed income of some sort then it doesn’t take much debt to really put that person over the edge and not be able to function properly uh in other situations if someone’s gainfully employed and they don’t have a lot of debt we’re not likely going to recommend any kind of chapter it really depends on the case but there is no definitive amount that someone has to have or not have to be eligible to file a bankruptcy it just comes down to good sense and judgment and the particular situation of the individual
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About the author. David M. Siegel has represented consumer bankruptcy clients in the Northern District of Illinois since 1991 and is the author of several books on consumer bankruptcy. The firm has offices at 790 Chaddick Drive, Wheeling, IL 60090 and 10540 S. Western Ave, Suite 202, Chicago, IL 60643, and handles cases by phone for clients throughout the Chicago area.
This article is general information about Illinois and federal bankruptcy law. It is not legal advice, and reading it does not create an attorney-client relationship. Every case turns on its own facts — speak with an attorney about yours.