This is a question I get quite often - "How much debt do I need to have in order to file bankruptcy?"

The answer might surprise you - it depends!

Are you self-employed?

Have you had a drop in income?

What type of debt do you have? Business debt? Medical? IRS?

Typically, our answer is that you need to have more debt than you can repay over a reasonable period of time. So someone with $30,000 in debt who makes $50,000 per year may be a good candidate for bankruptcy. Whereas someone with $100,000 in debt who makes $1 million per year may be a bad candidate for bankruptcy.

Today's discussion stems from a conversation George had with a potential client. This person bought a new car for $25,000, with payments of $725 per month on a 5-year loan at 20% interest!

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To contact Shawn Yesner, you can email him at [email protected] or visit www.YesnerLaw.com.