What are the New Chapter 13 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
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:
- Own several investment properties
- 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
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