New Chapter 13 Debt Limits

On June 21, 2022, President Joe Biden signed the Bankruptcy Threshold Adjustment and Technical Corrections Act.  This new Law #117-151:

• Increases  Chapter 13 Bankruptcy Debt Limits to $2.75 million (only individuals can  file Chapter 13 – not businesses).
• Does not distinguish categories of debts as it allows one single total of all debts.
• Debt limits are not specific categories as to whether the debt is secured or unsecured.  

In other words, you can now have $2.1 million in secured debt and $500,000 in unsecured and you would qualify for a Chapter 13 bankruptcy whereas in the past you could not.

Debtors can avoid filing a Chapter 11 Bankruptcy if they want to reorganize and keep their assets.

New debt threshold limit benefits many debtors who exceeded the old debt limits, for example:

If Debtors:

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

This new Law has a significant advantage to individuals with high debt and want to keep their assets. (this enables help with home Foreclosure).

If you are considering filing Chapter 13 Bankruptcy, I am here to meet with you for a free BK consult.   

Call me today:  Ralph A. Ferro, Jr., Esq.  (201) 446-5904 – NJ Bankruptcy Lawyer