Sunday, February 19, 2012

What Are the Debt Limits in a Chapter 7 and Chapter 13 Filing?

Can you have unlimited debt if you file a Bucks County bankruptcy? It depends on the type of bankruptcy, either Chapter 7 or Chapter 13.

In a bizarre twist, there are no debt limits in a Chapter 7 filing but there are limits for a Chapter 13. The current limits for a Chapter 13 filing are $360,475.00 for unsecured debt and $1,081,400 for secured debt. Under the current bankruptcy code these amounts are adjusted every three years and is based on the consumer price index for all urban consumers. The next scheduled adjustment is April 1, 2013.

Thus, if you are a former millionaire who has millions of dollars in debt and pass the means test, you may qualify for a Chapter 7. If, however, you are that same millionaire and you are slightly above the median income for your household size (which would put you into a Chapter 13), you cannot file due to the debt limit, thus precluding you from the benefits of a bankruptcy in Bucks County.

Of course, whichever chapter of bankruptcy you file for in Bucks County, there are still many debts that cannot be discharged.

1 comment:

  1. Very nice post,thanks for sharing the information.
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