Congress recently passed legislation entitled The Bankruptcy Threshold Adjustment and Technical Corrections Act which the President signed into law on June 21, 2022. The changes to the law will help people because it significantly expands who can qualify for Chapter 13 relief. Chapter 13 is a reorganization bankruptcy for individuals which gives people an opportunity to restructure their debt through a court approved plan for a period of up to 60 months.
Prior to the law change an individual could qualify for Chapter 13 if they had “noncontingent, liquidated, unsecured debts that aggregate less than $465,275 and noncontingent, liquidated, secured debts of less than $1,395,875.” 11 USC 109(e). Under The Bankruptcy Threshold Adjustment and Technical Corrections Act the debt limit is raised to an aggregate of $2,750,000 with no distinction between secured and unsecured debt. This will give relief to people who, before the law change, could not qualify for Chapter 13 and might have been forced to choose between filing a Chapter 7 or a Chapter 11, or not filing bankruptcy at all.
Bankruptcy can be a valuable tool for individuals and businesses looking to get out from under insurmountable debt to get a fresh start. The Bankruptcy Code consists of five distinct types of bankruptcy for individuals and businesses for debts owed in the United States (the sixth, Chapter 9, is only available to municipalities to reorganize […]
Many people in need of legal advice concerning financial problems and the possibility of filing bankruptcy understandably want to get it done as cheaply and efficiently as possible. In today’s world of easy internet access, many of us take it upon ourselves to research answers online to become educated on the benefits and pitfalls of […]