How Much Debt Is Too Much Debt?


Nobody wants to declare bankruptcy. It’s scary, it’s intimidating, and it can feel like a last resort. However, if you’re dealing with unmanageable levels of debt, it’s important to consider whether bankruptcy may be the right choice for you.

That said, how do you know how much debt is too much debt? In this post, we’ll explore some factors to consider when evaluating your debt level and determining whether bankruptcy might be the best option.

Understanding the Debt-to-Income Ratio

One of the most important factors in determining whether your debt is manageable is your debt-to-income ratio. This number represents the amount of debt you have relative to the amount of income you have coming in each month.

If your debt-to-income ratio is above 50%, it’s likely that you’re struggling to keep up with your payments and may benefit from bankruptcy. However, if your ratio is below 40%, you may be able to handle your debt with some budgeting and assistance from a credit counselor.

Is Paying Off Your Debt Realistic?

Of course, the sheer amount of debt you have is another important factor. While there’s no specific number that determines whether your debt is too high or not, if you owe more than you can reasonably pay back in a few years, it may be time to consider bankruptcy.

For example, if you have $100,000 in credit card debt and can only afford minimum payments, you’ll be paying off that debt for decades. Bankruptcy may provide a faster, more effective solution.

The Types of Debt You Owe Matters

The types of debt you have can play a role in determining whether bankruptcy is the right choice for you. For example, if you have mostly unsecured debt (like credit cards), bankruptcy may be a good option. However, if you have mostly secured debt (like a mortgage), bankruptcy may not be as helpful, as you could potentially lose your home.

It’s important to consider all of your debts and how they would be impacted by bankruptcy before making a decision.

Your Age & Earning Potential Can Make a Difference

Your age and income potential are important factors to consider when evaluating your debt. If you’re young and have a high earning potential, you may be able to pay off your debt over time.

However, if you’re older and closer to retirement, it may be harder to make up for lost time and income. Additionally, if you’re already struggling to make ends meet, it may be difficult to increase your income to a level that allows you to pay off your debt.


Declaring bankruptcy is never an easy choice, but it can provide a fresh start for those struggling with unmanageable levels of debt. When evaluating your debt, it’s important to consider factors like your debt-to-income ratio, the amount of debt you have, your age and income potential, and the types of debt you owe.

By carefully considering these factors, you can make an informed decision about what the best course of action is for you. Ultimately, the key is to take control of your debt and find a solution that works for your unique situation. At Buchalter & Pelphrey Attorneys At Law, we are dedicated to helping people like you find meaningful debt relief.

Contact us today to schedule a consultation and learn more about our services.

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