Can you have too much debt to file Chapter 13?
One of the traps within the bankruptcy code is the 109(e)debt limit. This limit was included in 2005 bankruptcy reform, and designed to force high debt consumer debtors into filing Chapter 7 or Chapter 11 bankruptcy.
The limits increase on April 1, 2010 to keep up with the Consumer Price Index.
Cases filed on or after April 1st are allowed to proceed in Chapter 13 so long as unsecured debt does not exceed $360,475.00 and secured debt does not exceed $1,081,400.00 on the date of filing.
A debtor who has more than the allowed limit in either category will likely be forced to convert.
These numbers will be important to you if for example: you have personally guaranteed corporate loans (these tend to me hundreds of thousands of dollars), if you own more than one house (two half-million dollar mortgage balances and a car or two may push you over the limit), if you have massive amounts of student loan debt, or if you’re thinking about stripping your second mortgage in a Chapter 13.
You and I will need to discuss your debt and liabilities. We’ll determine if you’re at risk of being forced to convert.
Call Attorney McDuffie at (404) 418-8879 for your consultation.