The amount of debt owed by a Chapter 13 Debtor in Bankruptcy is limited by 11 USC Section 109(e). Individuals with debt in excess of the limits do not qualify for a Chapter 13 Bankruptcy, also referred to as a reorganization of debts. Adjustments to Section 109(e) are made every three years and are adjusted for inflation in accordance with Section 104(a). The debt limit last increased from on April 1, 2010 from $336,900 to $360,475 for unsecured debt and from $1,010,650 to $1,081,400 for secured debt. The higher the debt limits, more individuals will qulaify for a Chapter 13 bankruptcy where they can more easily strip a wholly unsecured junior lien on depreciated real estate. Individuals carrying debt in excess of the Chapter 13 debt limits will still be eligible to file a Chapter 11 bankruptcy, which is typically reserved for incorporated entities.
If there are any general questions or topics you would like to read about relating to bankruptcy law in the Eastern Pennsylvania region, you may contact the Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008 or 610-432-3111 or email brad@sadek-cooper-site. Thank you.