• Home
  • Bankruptcy in Brief
  • ABC’s of Bankruptcy
  • Considering Bankruptcy
  • True Stories
  • Chapter 13
  • Blog
  • About Us

Northern California Bankruptcy Lawyer

On The Bankruptcy Soapbox

The Soap Box
  • How bankruptcy works
  • Mortgage Matters
  • Consumer Rights
  • Newsworthy
  • You & Your Lawyer
  • Small Business
  • Family Law

Chapter 13 debt limits double for couples

By Cathy Moran

mining-car-double-800px

Each debtor in a Chapter 13 was entitled to debts within the debt ceilings for Chapter 13 eligibility according to a recent bankruptcy decision out of Kansas called Dana Werts.

That effectively doubled the amount of debt a married couple could have and still meet the debt limits of Chapter 13.

Judge Karlin recognized that a joint case is simply two separate cases administered together.  The debt of each spouse should be separately calculated and measured against the debt cap.

Previously,  courts have treated a joint case as though it were a single person and required that the debts of the couple be combined to look at Section 109 eligibility.

Even if we’re not in Kansas

This is a marvelous decision for Californians where hard times and underwater real estate increasingly find married couples with collective debts in excess of the limits.  I have found myself deconsolidating cases filed jointly when it was determined that the total debt rendered the couple ineligible, if you assume that the 109 limits apply to the sum of the debts.

It then raises the question of exemptions:  if a joint case is really two cases, are not the debtors entitled to two sets of exemptions?

My thanks to my friend Doug Jacobs for pointing me to this case.

More

Should both spouses file bankruptcy?

California’s phantom discharge for non filing spouse

How Chapter 13 works

Filed Under: Chapter 13, Lawyer To Lawyer

Coronavirus & Your Finances

About The Soapbox

You've arrived at the Bankruptcy Soapbox, a resource of bankruptcy information and consumer law.

Soapbox is a companion site to Bankruptcy in Brief, where I try to be largely explanatory and even handed (Note I said "try").

Here, I allow myself to tell stories and express strong opinions on how I think law should work for the consumer and small businesses when it comes to debt.

Moran Law Group
Bankruptcy specialists for individuals and small businesses in the San Francisco Bay Area

How Bankruptcy Works

What Everyone Knows About Bankruptcy: Not

Lots of people profess to know all about bankruptcy. Whether they have good information or not. But other professionals should know better than to advise people about the workings of bankruptcy. And if they don't know better, they should be made to pay, in some exquisitely painful way, for the harm they … Read more

More Posts from this Category

643 Bair Island Road
Suite 403
Redwood City, CA 94063
Phone: (650) 694-4700

Categories

All content copyright © Moran Law Group. All rights reserved.