Deja Q
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Thu Jul-21-05 07:13 AM
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Poll question: How much debt would you need to have before considering bankruptcy? |
OrlandoGator
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Thu Jul-21-05 07:16 AM
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1. Any debt under $15,000 can be managed. |
undeterred
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Thu Jul-21-05 07:18 AM
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2. Not if you're living on a disability income |
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A debt of $5000 can take years for someone with a subsistence level income to climb out of.
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Deja Q
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Thu Jul-21-05 07:23 AM
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3. And given how companies won't hire those who declared BK, would you STILL |
dsc
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Thu Jul-21-05 07:29 AM
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you are better of creditwise, and thus hiring wise, if you declare bankrupcy than if you have massive charge offs and other such problems due to non payment. Neither is ideal but bk is better.
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Land Shark
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Thu Jul-21-05 07:29 AM
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5. depends on income, but the law changes on October 1 for the worse |
Jacobin
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Thu Jul-21-05 10:36 AM
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Jacobin
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Thu Jul-21-05 10:39 AM
Response to Reply #12 |
13. You can't just look at one side of the equation |
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You have to consider assets, debts and income to make that determination.
If you try to file a Chapter 7 (even under the current law) and you have signficant income left over after you pay your ordinary expenses, the U.S. Trustee's Office can file a motion to convert your case to a Chapter 13 to require you to pay off all or part of your debts.
If you think you need to file, see a professional.....BEFORE October 18, when the law becomes draconian
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Go Eagles
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Thu Jul-21-05 09:13 AM
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It depends on your income relative to the amount you owe along with other circumstances (number of children, cost of living, medical condition/bills, etc). It also depends on what type of debt you are talking about. When I was in college and scraping by, 6,000 dollars in credit card debt had me barely hanging by a string but I'm close to that now (I had kept a zero balance but a new house and the expenses that go with it has set me back) and it doesn't have me worried. Are you just referring to credit card debt or do you mean all debt? If you totaled up everything, my wife and I owe about 300,000 when you factor mortgages on a house and condo (rental) along with some business loans. Some of those debts are considered good debt because they allows us to generate income and the interest incurred is offset by income earned.
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ProfessorGAC
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Thu Jul-21-05 09:41 AM
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7. Can't Answer Within Your Poll, Because. . . |
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. . .i think it's a matter of debt to revenue ratio. I think anyone exceeding 11 parts debt to 12 parts income is in trouble, and if the ratio exceeds 1.0, you're financially distressed. If it hits 1.33 to 1, you're done. The Professor
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patcox2
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Thu Jul-21-05 10:04 AM
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9. Current obligations exceeding current income, sir. |
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Or current debts exceeding current assets, depending on the form of bankruptcy in question, and complicated slightly by personal allowances, exempt income and property, and other details. But in general, the two circumstances in which it is legal are either current obligations exceeding current available income, or total debts exceeding total assets.
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ProfessorGAC
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Thu Jul-21-05 10:31 AM
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10. There Are Extenuations |
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We have people analyzing delinquencies at the bank (of which i'm a board member) all the time. The danger points are those i provided. The Professor
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patcox2
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Thu Jul-21-05 10:01 AM
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8. More than I can pay. That is, after all, the legal standard. |
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Obligations in excess of your ability to pay.
Of course, any obligations taken on with the knowledge that you would be unable to pay would not be dischargeable, as that would be considered fraud.
The most honorable situations for bankruptcy involve people who have encountered an unexpected or involuntary obligation (medical bill, lawsuit) or an unexpected or involuntary reduction in income (loss of job.) A good argument can be made that someone who has simply borrowed and borrowed and borrowed until they could not repay, has no right to relief. But fortunately, the bankruptcy courts, prior to the new law, anyway, don't press the issue.
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KarenInMA
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Thu Jul-21-05 10:35 AM
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Plenty of people have over $200-300k in mortgage and or student loan debt, and they are fine. It depends on the type of debt, the debt to income ratio, the interest rates etc ect.
For instance: $5000 of credit card debt at 16% capitalizing monthly, is SO MUCH WORSE than $20,000 in student loan debt, locked at under 5%. The 5k will end up costing you more.
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