Chapter 13 debt limits are one of many eligibility necessities to file for this type of chapter reorganization. The check has two prongs: unsecured debt and secured debt. Are available underneath every prong and also you meet the debt limits check.
For circumstances filed on April 1, 2025 and afterwards, the Chapter 13 debt limits are:
| UNSECURED DEBT | $526,424 |
| SECURED DEBT | $1,580,125 |
The exact numbers for secured and unsecured money owed are adjusted each three years to account for inflation.
How debt is categorized
Unsecured debt is an obligation for which there isn’t any collateral. Typical unsecured money owed are bank cards, private loans, medical payments, on-line extensions of credit score.
Secured debt is debt wherein the creditor has a lien on an asset which may be foreclosed for those who don’t pay. Typical secured debt consists of mortgages on actual property and automobile loans. Additionally secured are obligations imposed by regulation, like tax liens, property taxes, and cash judgments.
When the mortgage was for enterprise
It may get tough if the mortgage in query was made to or for a enterprise. Secured debt, for Chapter 13 elgibility functions, means debt secured by the property of the person submitting chapter.
So, if the enterprise is an organization or an LLC, debt secured by the entity’s belongings just isn’t “secured” for the needs of this calculation. It’s the other if the enterprise is a sole proprietorship; then as a matter of regulation, there isn’t any distinction between the person and the enterprise.
Measuring the secured declare
A declare is secured solely to the extent that there’s worth within the collateral accessible for fee of the declare. So that you may need a scenario the place a big tax lien has been recorded, however the worth of the belongings to which the lien attaches is way lower than the tax due. Then, the declare is secured solely to the extent of the accessible collateral worth; the stability of the lien is unsecured.
Additionally, the declare isn’t just the principal owed, however the quantity essential to pay the debt in full. So, a secured dwelling mortgage consists of not solely the principal stability, however any late charges, lender advances, and unpaid curiosity.
The opposite Chapter 13 eligibility necessities
There you’ve gotten the Chapter 13 debt limits. However the debt limits should not the one eligility assessments. Chapter 13 is simply accessible to people. Firms and LLC’s can’t file Chapter 13.
And, the person will need to have a daily revenue from which Chapter 13 funds may be made.
Extra
Chapter 13 and the means check
How are Chapter 13 funds calculated
