Chapter 13 Debt Limits

People often wonder if they have enough debt to file bankruptcy. A person can file bankruptcy regardless of the amount of debt they have. There is no minimum amount needed to file for bankruptcy protection. But did you know that you can have too much debt to file a Chapter 13? There is a maximum amount of debt that you can have to be in a Chapter 13. The Bankruptcy Code section 109(e) sets certain unsecured and secured debt limits for individuals filing for a Chapter 13. As of April 1, 2013, the Chapter 13 debt limits are $383,175 (unsecured) and $1,149,525 (secured). The secured limit includes all debt secured by personal property owned by the debtor such as vehicles and mortgages. The unsecured limit is the total of all amounts owed on credit cards and other consumer debts, taxes owed and even disputed debts in most cases.

These statutory debt limits are adjusted periodically every three (3) years according to the consumer price index and the next debt limits adjustment will be in 2016.

Does this mean that you cannot obtain relief? Certainly not. Individuals who exceed the Chapter 13 debt limits still have the option to file under Chapter 7 or Chapter 11. At the Law Firm of Seymour and Associates, P.C., our experienced attorneys sit down with every client and advise which form of bankruptcy they qualify for and which best fits their needs. Contact us for a free consultation today.