Click here to see the current Chapter 13 Debt Limits effective April 1, 2016 and valid through 2019.
The chapter 13 debt limits for all of calendar year 2015 will remain unchanged from the 2014 debt limits. As of April 1, 2014 and continuing until the next debt limit adjustment on April 1, 2016, the chapter 13 debt limits are:
Unsecured debt limit: $383,175
Secured debt limit: $1,149,525
These 2015 chapter 13 debt limits are set by section 109(e) of the federal Bankruptcy Code and are adjusted (usually upward) every three years according to the consumer price index. The next chapter 13 debt limit adjustment will occur on April 1, 2016.
Note that the secured debt limit of $1,149,525 includes the total of all debt that is secured by personal and real property owned by the debtor including mortgages secured by real estate (i.e., residential homestead mortgages as well as mortgages on rental or commercial properties, if any) and other collateralized debts such as vehicle loans, equipment loans, etc. The secured limit may also include tax liens.
The unsecured debt limit of $383,175 includes the total of all amounts owed on unsecured lines of credit, credit cards, medial debts and other consumer debts, some taxes owed and even disputed debts in most cases. This unsecured debt limit is calculated per person in the event that a married couple files a joint chapter 13 bankruptcy case.
Any individual that is employed or self-employed in business is eligible for chapter 13 bankruptcy relief so long as the individual’s unsecured debts are less than $383,175 and secured debts are less than $1,149,525.
Individuals who exceed the chapter 13 debt limits still have the option to file under chapter 7 so long as their income qualifies under the means test, or they may otherwise file an individual Chapter 11 proceeding, particularly for individuals with income-producing asset holdings such as rental properties and other property holdings that could be liquidated in chapter 7.
If you exceed the 2015 chapter 13 debt limits, read more about alternatively filing under chapter 11 at What is Individual Chapter 11 Bankruptcy and Why Would I file an Individual Chapter 11?
Attorney Lynn Wartchow advises clients on which form of bankruptcy they qualify for and whether Chapter 7 or Chapter 13 fits their needs best. Contact for a free consultation and more information on all your options available in bankruptcy.