Bankruptcy

Chapter 13 Debt Limits Increase By 7%

By Kent Anderson, Oregon Bankruptcy Attorney

Debt limits for Chapter 13 increase April 1, 2010, to $360,475 of unsecured debt and $1,081,400 of secured debt.  This change represents an increase of about 7% over the Chapter 13 debt limits in effect prior to the change.  Congress limited the amount of debt owed by the debtor in a Chapter 13 case but adjustments to the debt limits are scheduled to occur every three years on the first day of April in the year of adjustment beginning April 1, 1998.  The Bankruptcy Code in §109(e) prohibits use of Chapter 13 by individuals with debts that exceed the specified limits.  The adjustments are required by §104(a) of the code and an adjustment is due this year.

The adjustment of various dollar amounts specified in the bankruptcy code is intended by statute to reflect the change in the Consumer Price Index for All Urban Consumers, published by the Department of Labor, for the most recent 3-year period ending on December 31 of the prior year.  The dollar amounts are rounded to the nearest $25 increment and apply to a number of different dollar limits impacting Chapter 7, 11, 12 and 13 cases.

Full post as published by Bankruptcy Law Network on February 28, 2010 (boomark / email).