Click here to see the current Chapter 13 Debt Limits effective April 1, 2016 and valid through 2019.
As of the date of this post, the debt limits for Chapter 13 bankruptcy are $1,081,400 in secured debt plus $360,475 in unsecured debt (see the 2014 debt limits here). These limits include only debts that are not disputed, non-contingent and liquidated. This means that amounts which are not yet decided (for example, a potential award of attorney fees in a pending lawsuit) may not count toward these limits. Taxes (whether dischargeable tax or non-dischargeable tax) are included in the unsecured debt limit calculation and disputing a debt without cause generally does not remove it from either calculation.
These statutory debt limits for Chapter 13 are adjusted every three years and the next adjustment is scheduled to occur in 2013. Note: The 2014 Chapter 13 debt limits have been updated as of April 1, 2013.
If you exceed these Chapter 13 debt limits, you can still file for Chapter 7 bankruptcy assuming that all other eligibility criteria for Chapter 7 are met under the “means test”. However, if you are above the debt limits for Chapter 13 and also above the income qualification for Chapter 7, you may still file an individual Chapter 11 bankruptcy proceeding, which is a more involved and expensive bankruptcy proceeding than Chapter 13 however an individual Chapter 11 has unique opportunities to reorganize certain debts with more favorable terms.
Lynn Wartchow is a bankruptcy attorney located in Edina, Minnesota and representing clients in both Chapter 7 and Chapter 13 consumer bankruptcy proceedings throughout Minneapolis and St. Paul in Minnesota. Contact for a free consultation and more information on options available under Chapter 13 bankruptcy.