Generally speaking, if your general unsecured debts are less than $394,725
and your secured debts are less than $1,184,200, you will be eligible
for relief under a Chapter 13 bankruptcy. These limits are subject to
being changed every three years.
In order to qualify for a Chapter 13 bankruptcy, your general unsecured
and secured debts cannot exceed the above referred to limits set by bankruptcy
law. If the total amount of your non-contingent, liquidated debts exceed
these limits, you will not be eligible to file for a Chapter 13 bankruptcy
relief. However, do not be discouraged if, at a glance, it appears that
your debts far exceed these limits; it is important to keep in mind that
not all of your debts will necessarily be included in counting against
these limits - it is entirely possible that you might still be eligible
to file under this particular chapter if part of your debts are disputed,
contingent or not liquidated. An unliquidated debt is a debt in which
your responsibility to pay has yet to be determined, or where the amount
cannot be readily determined. This tends to involve accident claims or
other personal injury claims. Contingency debts are debts that you are
not obligated to pay unless a certain event occurs. If the event never
takes place, you will never be expected to pay it, which is why it does
not count toward the debt limit.
Reviewing and Categorizing Your Debts and Figuring Out What Doesn’t Count
As you weigh your options, it is crucial to take the time to review and
categorize your debts. This will help you understand whether or not you
will be eligible for Chapter 13 relief. Through this process, you might
realize that some of your debts do not count toward debt limits, for example
you might be able to divide certain secured debts into secured and unsecured
portions, which will increase your unsecured debt and decrease your secured
debt leaving you eligible for Chapter 13 relief.
You are expected to list your contingent and unliquidated debts in your
bankruptcy papers, but they do not count toward the chapter 13 debt limits
because the amount owed are either disputed or not firmly established.
If You Still Do Not Qualify
If strategies such as removing a lien or part of a lien from a secured
property in bankruptcy does not help you decrease your secured debt enough
to stay under the limits, you will have to consider other options. For
example, a Chapter 20 bankruptcy is a two-step strategy that allows you
to deal with your debts in bankruptcy court. To proceed with a Chapter
20 bankruptcy, you must first file for a Chapter 7, which will wipe out
your unsecured debts, which might then allow you to meet the Chapter 13
debt limits. Of course, you will not get a discharge at the end of your
Chapter 13 bankruptcy since you already received one in the Chapter 7
within the previous four years.
That said, a Chapter 13 bankruptcy will give you additional time to catch
up on secured debt or non-dischargeable debt that you cannot afford to
pay at once. It can also allow you to cram down or strip off liens.
Before you proceed with any of these steps, however, you should first consult
with a skilled, experienced bankruptcy attorney to ensure you are on the
right path toward a better financial future. Bankruptcy laws can be incredibly
complex and intricate and a lot is at stake, so make sure you take the
time to seek the legal help you need to get you through this undoubtedly
difficult time.
Bankruptcy Attorney in Hackensack
If you are considering filing for a Chapter 13 bankruptcy, first consult
with a skilled and experienced bankruptcy attorney in Hackensack. At The
Law Offices of Marc G. Alster, Mr. Alster and his knowledgeable staff
take a personal approach with every client to ensure the best strategy
is used for solving their unique financial burdens. He will take the time
to discuss every alternative possible with you to ensure that you fully
understand what is available to you and how each one will affect your future.
Get started on your path toward debt relief and contact Mr. Alster at
(201) 878-4630 to schedule your free initial case evaluation. You should not have to
go through this difficult situation on your own.