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New Debt Limits for Chapter 13 Bankruptcy Take Effect
New debt limits for Chapter 13 bankruptcy took effect today. For cases filed on or after April 1, 2016, the new limits are:
$394,725 for unsecured debt
and
$1,184,200 for secured debt.
The former limits were $383,175 for unsecured debt and $1,149,525 for secured debt. The increase in debt limits essentially means that more people will qualify for Chapter 13. Lower debt limits disqualify more people from filing Chapter 13 bankruptcy.
Debt Limits for Chapter 13 Bankruptcy
Chapter 13 debt limits are set by Section 109(e) of the Bankruptcy Code. These limits are adjusted every three years to align with the consumer price index. The next Chapter 13 debt limit adjustment will not occur until April 1, 2019.
The unsecured debt limit includes all amounts owed on credit cards, medical debts, and other types of consumer debts, like unsecured lines of credit and some taxes.
The secured debt limit includes all amounts owed by the debtor and secured by personal or real property owned by the debtor, including mortgages, car loans, unsecured lines of credit (or “HELOCs”), and tax liens.
Chapter 13 bankruptcy may allow you to strip off a fully unsecured second mortgage or HELOC, cure missed mortgage or car payments over a period of time (as opposed to right now), and pay off tax liabilities. In a Chapter 13, you still control your home and car, and we will propose a manageable repayment plan.
If you exceed the new debt limits for Chapter 13 bankruptcy, you may still have the option to file bankruptcy under either Chapter 7 or Chapter 11.
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Brian Lee from Lee Legal was an amazing attorney to work with. He took his time, reviewed my documents and we discussed my situation thoroughly. He explained the process and my options as well as gave his recommendation. Not only did he assist, but he ensured that I knew this...
I was very nervous and scared about going through this process. But Brian was very knowledgeable and helped me through it. I was notified about any and all updates to my case and he was very responsive when I had questions regarding any concerns I had. Although a bit nerve...
Brian provided me with a very detailed analysis about my potential case after our first consultation. He promptly responded to all my complex questions, especially navigating student loans and some tax discussions. He is very professional and experienced at what he does, I would...
I've had the pleasure of working alongside Brian V. Lee for several years, and I can say without hesitation that he is one of the most knowledgeable bankruptcy attorneys in the DMV area. Brian's command of Chapter 7, 11, and 13 practice is exceptional, and his clients in the DC...
Brian has the amazing talent of taking complicated legal matters and distilling them down to seamless, frictionless resolutions. He is a phenomenal problem solver and a trusted advisor.
Brian is both warm and professional. He helped me navigate a financial issue that I had not been looking forward to working on and he made the entire experience non-stressful, receiving a lot of anxiety I had around the matter. He is straight forward and a fantastic problem...
I had the opportunity to work with Brian at a time when I was challenged by a professional setback and forced with the challenge of making some very difficult legal decisions. Additionally, I worked with him again as I was dealing with some financial issues pertaining to my...
Still several years from Public Service Student Loan Forgiveness and saddled with significant student loan payments in proportion to my income, I came to Lee Legal to explore the bankruptcy path. Through his counsel, Brian took the fear out of the process and helped me to...
