BANKRUPTCY UPDATES

• Book Publisher Houghton Mifflin Harcourt Files for Bankruptcy (May 17, 2012)
• Las Vegas Tycoon Lists $500 Million in Debts in Bankruptcy Filing (May 15, 2012)
• Luxury Boat Builder Files for Bankruptcy in Wake of Rising Debts (May 16, 2012)
• Television Service Provider Capitol Infrastructure Files Bankruptcy (May 10, 2012)
• Potential ResCap Bankruptcy Filing Spells Trouble for Ally Financial (May 14, 2012)

Debt Limits for Chapter 13 Bankruptcy

If you're feeling overwhelmed by debt, you've probably given thought to what personal bankruptcy might be able to do for you. And, as you may already know, there are limits to how much debt bankruptcy can help you eliminate.

If you're ready to speak with a bankruptcy lawyer about the specifics of your financial situation and learn how filing bankruptcy may be able to help you manage your debt, simply fill out this form and arrange a free, no-obligation consultation.

Secured vs. Unsecured Debts in Chapter 13

One distinction it's important to make when discussing Chapter 13 bankruptcy is the difference between secured and unsecured debts.

• Secured debts: These are connected to some kind of property (a home, a car, a boat, etc.). This property "secures" a borrower’s debt, which means that, should the borrower stop making payments on the loan, the lender can seize the property connected to the loan in exchange for payments.
• Unsecured debts: These are not linked to any kind of property, and include student loans, credit card loans, medical bills and payday loans. These debts are considered "unsecured" because a lender cannot take any specific item of property if a borrower stops making payments according to the terms of the agreement.

If you decide that Chapter 13 bankruptcy is the best way to deal with your financial distress, you'll find that it has limits for both secured and unsecured debts.

Specific Debt Limits in Chapter 13 Bankruptcy

In order to be eligible to file under Chapter 13 of the U.S. Bankruptcy Code, your debts cannot exceed these limits:

• Secured debt limit: Your secured debts cannot total more than $1,081,400.00.
• Unsecured debt limit: Your unsecured debts cannot total more than $360,475.00.

Please note that these limits are adjusted periodically for inflation, and may have changed since our last site update.

Chapter 13 bankruptcy works by having filers make regular payments to creditors as part of a three- to five-year repayment plan. In addition to considering debt limits, filers should:

• Have a regular, steady income: It's essential to have a dependable source of money coming into your household. If a petitioner in Chapter 13 bankruptcy misses a payment, he risks losing the protection of the court.
• Know why they want Chapter 13 protection: Chapter 13 can be used as a way to slow down foreclosure proceedings or the repossession of a car. Thanks to the automatic stay, a legal protection that halts all collection action while a bankruptcy case is pending, debt collectors are prohibited from taking any collection action.

Learn More about Chapter 13 Bankruptcy Protection from a Lawyer

If you're interested in learning whether or not Chapter 13 bankruptcy might realistically help you eliminate your debt and get back on track financially, now is the time to take action. Speak with a bankruptcy lawyer practicing near you and ask your questions. Simply fill out the from below to get started.