By: Jeff Curl
Numbers are going up in bankruptcy, in a good way.
Chapter 13 Debt Limits
Chapter 13 imposes a maximum amount of debt you are permitted to have on the date of filing. Every three years the debts limits for filing Chapter 13 increase on April 1. The new numbers for the 2013 adjustment:
Unsecured debt: $383,175
Secured debt: $1,149,525
This adjustment is a welcome increase, particularly for those in the Bay Area. A one million dollar mortgage is just not that uncommon around here, so the increase is not only welcome, but needed. In fact, I have a client with $373,000 in debt who is not eligible for Chapter 13 bankruptcy, but will be in a couple of weeks thanks to this increase.
Exemptions
The beginning of 2013 saw another increase that has already taken place: exemptions. Exemptions allow someone to protect and keep a certain amount of property in bankruptcy.
The most flexible and commonly used exemption — the wildcard — increased to $24,060. The wildcard can be used on item, or divided to cover many. Have $10,000 in your bank account and want to keep it? You can. And you can use that other $14,060 to protect other things as well. Other exemptions were increased as well, and we as bankruptcy attorneys are in a better position to protect our clients’ interests.
Number increasing in bankruptcy is sometimes a good thing.
Photo courtesy of Intamin10
