This update is excellent news for anyone who is considering personal bankruptcy under chapter 13 of the bankruptcy code. On June 21st, 2022, the President signed the “Bankruptcy Threshold Adjustment and Technical Correction Act” into law. Among other changes, the new statute now allows the filing of chapter 13 cases for debtors who have noncontingent, liquidated debts of less than $2,750,000–nearly double the amount of debt allowed under prior versions of the statute. Additionally, the new statute does not require any particular amount of secured debt versus unsecured debt in the calculation of the total debt that can be owed to file in chapter 13. This is a major, but very positive, departure from prior versions of the law. In totality, the new amendments will be a welcome adjustment for prospective bankruptcy debtors who live in areas with higher property values and who may have higher general liabilities, like Palo Alto, Mountain View, Los Altos, Sunnyvale, Menlo Park, and much of the greater San Francisco Bay Area. This will enable these bankruptcy debtors to increasingly file in chapter 13 bankruptcy, instead of chapter 11 bankruptcy, saving very significant additional time and money.

This entry was posted on Friday, June 24th, 2022 at 3:05 pm and is filed under Can I file for Chapter 13 Bankruptcy?. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.