The value of money and debt have very different meanings for different people.
I had a potential client come in for a consultation who wanted to know if she had enough debt to file for bankruptcy. She owed about $8,000 and wasn’t sure if that was enough to file.For people who have $20,000 or $50,000 in debt, they would probably think $8,000 is nothing; they could easily pay it off.
This may be true. For some people, $8,000 is like $8.00. But from the prospective client sitting in front of me, that $8,000 in debt might as well have been $80,000. The value of money has different meanings for different people.
That’s why there are a lot of considerations to take into account when someone asks if they have enough debt to file bankruptcy. If someone is being sued by one of the creditors and was in danger of possibly losing assets, this would be a major factor. If a person makes very little money and is trying to support one or more children, that would be a factor.
In the case of the potential client with $8,000 in debt, both of these factors existed. The client had a car that was paid off and their bank account could have been in jeopardy if a judgment was entered as a result of the creditor’s lawsuit. At the same time their credit score continued to drop.
For this person, filing bankruptcy was a logical decision. The lawsuit was stopped and the $8,000 in debt was discharged.
Before you dismiss the amount of debt that you owe as too little to consider bankruptcy relief, check in with Steidl and Steinberg to discuss your options.