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  • Writer's pictureBrett Weiss

Why You Should Plan to File Chapter 13 *Before* June 21, 2024

On June 21, 2022, President Biden signed into law the Bankruptcy Threshold Adjustment and Technical Corrections Act (the “Act”), Pub. L. No. 117-151. (Stay with me here, it gets interesting.) Among other things, the Act increased the debt limits for Chapter 13 from a maximum of $1,257,850 in secured debts (such as mortgages and car loans), and $419,275 in unsecured debts (such as credit cards, medical debt, and most personal loans) to a single total of $2,750,000 of both secured and unsecured debt.

These changes have worked out very well. Many folks who didn't qualify for Chapter 13 previously were able to take advantage of its provisions. But the Act didn't make these changes permanent. They expire on June 21, 2024, unless Congress passes new legislation to extend them or make them permanent before then.

So if you have a large mortgage or car payment or tax liens or total debt that is more than the "old" Chapter 13 limits, you'd better make sure that you file before June 21, 2024, or you're looking at a Chapter 11 instead. Which we do, but they're a lot more difficult and much more expensive.

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