When debtors in Washington State are under pressure to fight off a garnishment from a debt collector they often are on the lookout for the the best bankruptcy attorney they can afford. Most debtors are frightened they they have been served with legal papers and are looking for answers to their many questions. Recently one of the mot common questions that I have had debtors ask is, how much debt do I have to have to file for bankruptcy? The answer is that there is no set debt limit that you must have in order to file for bankruptcy. With that said I usually won’t file a case unless a person has over $10,000 in debt as it just doesn’t make sense. The standard that debtors should follow is whether they believe that they will ever be able to pay back the debt. If you don’t think you will then bankruptcy may be a good option. With that said if somebody only has $5,000 worth of debt and wants to file bankruptcy, say to stop a garnishment they should think hard about what they are doing.
Filing bankruptcy on a small amount of debt will indeed stop the garnishment, however if somebody only has $5,000 worth of debt then their credit probably is not awful at this point and filing bankruptcy may lower their credit score. Further, a chapter 7 bankruptcy stays on a credit report for 10 years, although credit can be rebuilt in short order. Another thing to consider is that if a person makes below the minimum wage they may be judgment proof which means wages cannot be garnished even if the debtor is employed. For most people who have small debts, hiring a debt settlement attorney would make the most sense as debts can be settled for 30-50% of the total amount of debt owed and on a small amount of debt, that is not a whole lot.
If you are still unsure if you are a good candidate to file for bankruptcy, feel free to call Symmes Law Group at 206-682-7975 to learn about your options.