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Bankruptcy Blog
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Chapter 13 Debt Limits have been Increased
On June 21, 2022, the debt ceiling (in order to qualify for Chapter 13 Bankruptcy) increased to a combined total of $2,750,000. Previously bankruptcy filers were limited to no more than $465,275 in unsecured debts, and secured debts of no more than $1,395,875. Bankruptcy filers are no longer are required to limit debts in specific categories as secured and unsecured.
The change will sunset in two years, and the eligibility limits of Chapter 13 under 11 USC §109(e) will revert to the prior amounts, if the statutory change is not extended or modified. With high inflation, interest rates, skyrocketing home values, this change will allow home owners and those with higher debts stemming from many circumstances such as small business closure to successfully reorganize their finances.
Intersection of Eviction & Bankruptcy
There are several bankruptcy options for tenants who are facing eviction. These options sometimes depend upon which type of bankruptcy you file. The most common type of bankruptcy is Chapter 7 which discharges most unsecured creditors, and generally last 4 1/2 months. The other type of Bankruptcy is Chapter 13, which is a payment plan bankruptcy which typical last 5 years.
Landlord has not obtained an eviction judgment yet:
If a landlord has not obtained an eviction judgment prior to your bankruptcy, then the automatic stay prevents the landlord from moving forward with an eviction lawsuit. The stay can last until your Chapter 7 Bankruptcy case is closed in 4 to 6 months from filing.
Landlord has been awarded an eviction judgment:
If the landlord has already obtained a judgment for possession in an eviction lawsuit, then the only way to prevent an eviction is to deposit the total arrears with the bankruptcy clerk. In other words, depositing your back owed rent in an . . .
Landlord has not obtained an eviction judgment yet:
If a landlord has not obtained an eviction judgment prior to your bankruptcy, then the automatic stay prevents the landlord from moving forward with an eviction lawsuit. The stay can last until your Chapter 7 Bankruptcy case is closed in 4 to 6 months from filing.
Landlord has been awarded an eviction judgment:
If the landlord has already obtained a judgment for possession in an eviction lawsuit, then the only way to prevent an eviction is to deposit the total arrears with the bankruptcy clerk. In other words, depositing your back owed rent in an . . .
Should you Sign-up with a Debt Consolidation Company?
The assistance that a Debt Consolidation (or Debt Relief) companies offer generally comes in two flavors. The first flavor is Debt Management, and the second is Debt Settlement. Before signing-up with a Debt Consolidation Company, I recommend reviewing your bankruptcy options with us first.
Debt Management Plans:
In a Debt Management plan, the Debt Relief company offers to help you manage your payments to creditors. You make one monthly payment to the Debt Relief Company, and they in turn make payments to your creditors. The Debt Relief company will attempt to decrease interest rates, reduce minimum payments, and waive penalties.
Here are several reasons why Debt Management Plans may not be successful. There is no legal obligation for your creditors to work with the Debt Relief companies. Many creditors will voluntarily work with the consolidator, but many creditors will not. Therefore, you may not be able to consolidate all of your debts in the Debt . . .