The federal government enacted the Bankruptcy Threshold Adjustment and Technical Corrections Act on June 21, temporarily raising the debt limits to qualify for Chapter 13 and Subchapter V bankruptcy.
Whereas those filing for Chapter 13 bankruptcy previously could owe no more than $1,395,875 in secured debt and $465,275 in unsecured debt, a combined limit for both types of debt is set at $2.75 million. In other words, those looking to reorganize their debt in Chapter 13 can do so for up to $2.75 million, regardless of how much is secured or unsecured debt.
Small business owners also got a boot in potential relief with the extension of pandemic-era relief that expired in March. Whereas those filing for Subchapter V bankruptcy were limited to $2,725,625 in debt, that limit is restored to the $7.5 million limit provided under the CARES Act at the beginning of the COVID-19 pandemic.
Both of these expansions, however, sunset on June 21, 2024. At that time, they revert to the original bankruptcy debt limits unless Congress approves another extension or makes these limits permanent.
Do You Need Help with Bankruptcy?
The expansion of these debt limits can mean that now’s a good time to file for bankruptcy. If you’re seeking significant relief from consumer or business debt, Buchalter & Pelphrey Attorneys At Law can help.
Bankruptcy isn’t a bad word at our firm – we strive to make the process more comfortable because bankruptcy can offer people an important opportunity to refresh their finances.
For more information about how we can help, contact us online.