Are you considering filing bankruptcy? Are you unsure if it will be beneficial in your situation? Have you ever caught yourself dismissing the possibility because you feel you may have too much debt?
Is There a Limit to How Much Debt Can Be Discharged in Bankruptcy?
When filing Chapter 7 bankruptcy, there is no maximum limit to the amount of debt eligible for discharge. For Chapter 13 bankruptcy, there are limitations.
What Are the Chapter 13 Debt Limits?
In Chapter 13 bankruptcy cases, there is a maximum dollar amount of debt that is eligible (determined by bankruptcy law). The amounts are adjusted every three years. As of April 2019, the maximum secured debts to qualify for Chapter 13 bankruptcy is $1,257,850, and the maximum unsecured debts to be eligible for Chapter 13 bankruptcy is $419,275. If your debts in either category exceed these limits, Chapter 13 bankruptcy may not be available to you. (Secured debts refer to loans against property such as a home or auto loan, while unsecured debts refer to loans that are not secured by property such as medical bills, credit card balances, etc.)
What To Do When You Are At or Near the Debt Limits for Chapter 13 Bankruptcy:
If you are hoping to file Chapter 13 bankruptcy and you are at or near the maximum debt limits set by bankruptcy code, speak with an experienced attorney about determining what rules exist in the applicable Court for determining whether debts are secured or unsecured. This area of bankruptcy code is evolving. While limits are set by federal law, each Court jurisdiction may have different rules in place to calculate the numbers as well as different variables that all go into the equation determining the final debt calculations. Determining eligibility is not always cut and dry, particularly if debt totals are close to the maximums set by federal law.
Discuss Your Case With an Experienced Bankruptcy Attorney:
If you are hoping to file Chapter 13 bankruptcy and are discouraged by the maximum debt limits set by federal law, don’t give up on the idea until you sit down with an experienced attorney. Bankruptcy code can be complicated – you can’t count on getting an accurate final answer on whether or not you qualify unless you discuss your case in detail with an attorney experienced in your local area and Chapter 13 bankruptcy specifically.
Do you have questions about bankruptcy law and how to determine your eligibility to file bankruptcy? The experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. can help. We help good people through bad times every day, and we can help you, too.