Do I Have Too Much Debt for Bankruptcy?

Sometimes my clients wonder if there are any limits to the amount of debt they can have if they want to file bankruptcy. There is no limit to the amount of debt you can discharge through a Chapter 7. Chapter 13’s, however, are a different story. You can’t have more than $394,725 and/or $1,184,200 in unsecured and secured debt respectively. If your debt level exceeds one or both of these caps, then you have a couple options.

Firstly, you might be able to reduce the debt which counts towards your limits by paying off some of it. Another way to reduce your debt into the qualifying range is to file a Chapter 7 and then follow it up with a Chapter 13. Filing the Chapter 7 would discharge your unsecured debt, allowing you to qualify for a Chapter 13 so long as your secured debt is under $1,184,200. Though this is only an option if you haven’t filed a Chapter 7 in the past eight years or a Chapter 13 in the past four years and otherwise qualify for a Chapter 7.

If you’re in the Stockton area and have any questions regarding qualifying for Roseville bankruptcy, don’t hesitate to give our office a call for a free consultation.