If you feel overwhelmed and depressed about the amount of debt you carry, you might want to visit a bankruptcy lawyer and file for bankruptcy. However, you will need to discuss your debt in depth with the lawyer, and he/she will want you to know what "insurmountable debt" means. This term is at the center of most bankruptcy filings, and it is important to know the difference between a debt you can get on top of, and debt that has run away with your paycheck.
Defining Insurmountable Debt
Most people assume that insurmountable debt means any debt you think you cannot repay. For a few, any debt that they simply do not want to repay becomes insurmountable. There are "qualifiers" with regards to insurmountable debt, and you have to meet at least one or more of them before you attempt to file for bankruptcy.
What Qualifies You for Insurmountable Debt
The first thing your lawyer and the judge will do is look at what you have, what you can sell, what you can repay and the debt you have. If it is clear that you have enough assets to extinguish your debt, you do not have "insurmountable debt."
Additionally, the following qualifiers are examined:
- Debt exceeds current and future income and the debt is expected to or already has exceeded annual income
- You have NO assets that you can sell or cash out to pay part or all of the debt (e.g., no stocks, bonds, CDs, boats, second houses, etc.)
- You are currently unemployed and have been unemployed for the duration of the bankruptcy filing and hearing, OR
- You expect to be unemployed or laid off for several more months to a year
- You have no resources or family members from which you can borrow money on a monthly basis to pay your bills until you get back on your feet
- You cannot take a second mortgage or home equity loan out on your house to pay bills
- Your credit ratings are in the toilet
- The sum total of all you own, at yard sale or thrift store prices, would never equal enough to pay the debtors you owe.
- You have recently become incapacitated, disabled, or paralyzed and cannot work, AND you were the main breadwinner in the house.
There may be some other factors involved, depending on what state you live in, but you can discuss these special situations with your lawyer. Contact a law office like Patrick D. Riley for more information and assistance.