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

Northern California Bankruptcy Lawyer

On The Bankruptcy Soapbox

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

Chapter 13 Eligibility Greatly Expanded And Simplified

By Cathy Moran

chapter 13 debt limits

Congress has just expanded and simplified eligibility for Chapter 13 by enacting new debt limits.

This is big news and long-awaited.

Upon the president’s signature on S. 3823 on June 21, 2022, Chapter 13 debtors can have up to $2.75M in debts and qualify for the streamlined reorganization offered by Chapter 13.

The previous, two-part analysis that separately counted secured and unsecured debts is eliminated. So regardless of how a person’s debts are distributed between secured and unsecured, as long as the total, liquidated debt is under $2.75M, they qualify.

The new debt limits are effective immediately.

Who benefits from increased debt limits

Homeowners in high-cost real estate markets will no longer be pushed into Chapter 11, with its far more complex procedures for confirming a plan, by the old debt limits. Individuals with multiple properties are now more likely to qualify for Chapter 13.

Another group who stands to benefit are individuals in business, who either do business as individuals or who have guaranteed the debts of their corporation.

The list can go on: those with high tax debt, large judgments, or crushing student loans now have Chapter 13 as an option.

At base, this change in the law recognizes that most people with debts modestly over the existing debt limits can’t afford the attorneys fees required in a Chapter 11, and their financial affairs are not so complex as to require the creditor protections of Chapter 11.

See Why I Love Chapter 13

More from the Soapbox

  • Bankruptcy Discharge For One Spouse Yields Benefits For Non-filing SpouseBankruptcy Discharge For One Spouse Yields Benefits For Non-filing Spouse
  • California drivers score huge bankruptcy winCalifornia drivers score huge bankruptcy win
  • The Thousands That Sat In Mortgage Suspense AccountThe Thousands That Sat In Mortgage Suspense Account
  • Do I qualify for bankruptcy in the Bay Area?Do I qualify for bankruptcy in the Bay Area?
  • What Can Bankruptcy Do About Back TaxesWhat Can Bankruptcy Do About Back Taxes

Filed Under: Chapter 13, Featured Tagged With: 2022, chapter 13

About Cathy Moran

I'm a veteran bankruptcy lawyer and consumer advocate in California's Silicon Valley. I write, teach, and speak in the hopes of expanding understanding of how bankruptcy can make life better in a family's future.

Bankruptcy Basics

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. We dig deeper into how to consider bankruptcy and navigate a bankruptcy case.

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

How Bankruptcy Works

When Can I File Bankruptcy Again

Remember the old high school cheer:  two, four, six, eight, who do we appreciate? Turns out, that's not just a cheer, it's shorthand for the rule on when you can file bankruptcy again. And it points out that when you can file again depends on what kind of bankruptcy you filed last time. Here's how it … Read more

More Posts from this Category

643 Bair Island Road
Suite 403
Redwood City, CA 94063
Phone: (650) 694-4700
Phone: (650) 368-4700

Categories

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