To file for Chapter 13 bankruptcy, your existing debt cannot exceed a specific amount. However, there are ways to have certain debts excluded from the total amount of your calculated debt. In this blog, we explain what you need to know about Chapter 13 debt limits.
What Is the Debt Limit for Chapter 13?
Debt limit amounts fluctuate every three years. As of this writing, the limits are as follows:
- Secured Debt Limit: $1,184,200
- Unsecured Debt Limit: $394,725
If your debt exceeds these amounts, you will need to use another strategy to qualify for Chapter 13 bankruptcy. First, check to see if some of your debts actually count towards the limit. You might also be able to divide up your debts into different categories. This can be accomplished by moving an existing lien, or part of a lien, from your secured property in bankruptcy. The removed lien is then converted into unsecured debt. This will increase the amount of unsecured debt, but also decreases your secured debt, hopefully keeping you under the debt limit.
Spouses can also file under different chapters if their combined debt puts them over the limit. One spouse might try filing for Chapter 13, while the other can try filing for Chapter 7 bankruptcy.
Consider Chapter 20 Bankruptcy
A Chapter 20 bankruptcy can be used to help you qualify for Chapter 13. First, you will need to file for Chapter 7 to wipe out your unsecured debt. This reduction can sometimes be enough to allow you to meet Chapter 13 debt limits.
If you are having difficulty qualifying for Chapter 13 bankruptcy, you should immediately speak with a qualified bankruptcy attorney. At The Buchalter Law Group, we assist people who are dealing with overwhelming debt and those who are in need of legal guidance. Our team is dedicated to helping our clients find practical solutions for their financial difficulties. Speak with one of our lawyers today.
Call (321) 320-6088 to get started on your free case evaluation.