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Chapter 13 New Debt Limits

Chapter 13 New Debt Limits
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Chapter 13 New Debt Limits?

Senate Bill # S.3823 Debt Chapter 13 New Debt Limits Increase was Proposed for Chapter 13 Bankruptcies to Help Debtors

This Bankruptcy related Congressional Bill was proposed on 3/14/2022.

UPDATE:    Bill passed the House and Senate — President signed today.

Chapter 13 New Debt Limits Increased to $2.75 million (includes secured and unsecured debts)    GREAT NEWS

Chapter 13 New Debt Limits Background:

As of 4/1/22, Debt threshold limits for a Chapter 13 filing are:  (Debt limits are changed normally every three years).

  • Unsecured Debt:      $465,275   increase of $46,000
  • Secured Debt:          $1,395,875 increase of  $138,025
  • Total Debt Limit      $1,861,150 increase of  $184,025

It is important to note that the debt limits are specific to whether the debt is secured or unsecured.  Also, individuals can only file Chapter 13 (not businesses)

In other words, you could have $1 million in secured debt and $475,000 in unsecured and you would not qualify for a Chapter 13 bankruptcy.

This results in a debtor to be required to file a Chapter 11 if they want to reorganize rather than give up assets.

This debt threshold limits many potential debtors who exceed the debt limits, for example:

If Debtors:

  1. Own several investment properties
  2. Personally guaranteed a large business loan, in addition to their other debts.

Chapter 13 New Debt Thresholds  – Help to Debtors?

Bankruptcy Congressional Bill Proposed Overview

  • Introduced by:      Senator Grassley (R-IA)
  • Co-Sponsored by:  Senators:    Durbin (D-Il), Cornyn (R-TX) and Whitehouse (D-RI)
  • Bipartisan sponsorship
  • Debt limits increased to:     $2,750,000.00

It is important to note this Congressional Bill does not distinguish between secured and unsecured debt.

How can you voice your opinion to increase debt thresholds for Chapter 13 bankruptcy?

  • View this Bill # S.3823:
  • Contact your members of Congress to let them know how you feel about this bill

I definitely endorse the passing of this Bill to increase debt thresholds.   This congressional Bill helps debtors moving forward.  Bill #S.3823 is  referred to the Senate Judiciary Committee

This would be a significant advantage to individuals who have high debt and want to keep their assets.   Keep your home with Chapter 13 Foreclosure Help.

If you are looking to file Chapter 13, I am here to meet with you for a free BK consult.    Call me today:  Ralph A. Ferro, Jr., Esq.  (201) 446-5901 – NJ Bankruptcy Lawyer