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Chapter 13 Debt Limits

There are limitations set forth under 11 U.S. Code, Section 109(e) that limit the amount of debt an individual can have to be eligible to file under Chapter 13. A business cannot file under Chapter 13. Only an individual person or joint persons who are legally married (marriage, as defined under federal law).

Effective on 4/1/16 (valid through 3/31/19), the debt limits for filing a Chapter 13 are as follows:

  • Unsecured Debt Limitation: $394,725.00
  • Secured Debt Limitation: $1,184,200.00

The limitations listed above are adjusted every three years.

The next debt limitation adjustment will occur on April 1, 2019.

Unsecured Debt Limitation

The unsecured debt limitation includes the sum total of what is owed by the debtor on:

  • Unsecured lines of credit
  • Credit cards
  • Medical debts
  • Payday loans
  • Post repossession auto loans
  • Post-foreclosure mortgage debt
  • Some taxes
  • Disputed debts

It is important to consult with an attorney who is knowledgeable about the federal bankruptcy laws, especially when it comes to your eligibility to file under Chapter 7, Chapter 13, or Chapter 11. It may be advisable in some cases for a husband and wife to file separate bankruptcy cases where one spouse has a large debt load, while the other may not. This can avoid the headache of determining how much debt each individual has under their name, for purposes of determining the debt limitation in Chapter 13. There is no debt limitation in Chapter 7 or 11.

Secured Debt Limitation

The secured debt limitation includes the total of all the debt that is secured by personal property of the debtor and real estate owned by the debtor. This includes secured debts such as mortgages, auto loans, and lines of credit secured by specific property of the debtor. It is important to provide your attorney with accurate information and documentation for secured debts, so that they will know precisely which property secures a loan. A federal or state tax lien can also be included in the calculation of this debt limitation.

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