Chapter 13 of the U.S. Bankruptcy Code allows debtors to reorganize their debts under what’s sometimes called a “wage earners plan” or an “adjustment of debts.” The purpose of the chapter is to allow debtors to repay some of their debts without losing some types of property, especially houses. However, there is a debt limit that bars some people from filing a Chapter 13 bankruptcy in Las Vegas. Here are 4 things you need to know.
1.The Chapter 13 limits are fairly high, so most people in Las Vegas will not breach the limit. They are $360,475 for unsecured debt (like credit cards) and $1,081,400 for secured debt (houses, cars, etc.).
2.The limits increase every three years on April 1. The last one occurred in 2010, and the limits grew by roughly 7%. Before that, in 2007, the limits went from $307,675 to $336,900 for unsecured debt and $922,975 to $1,010,650. The next increase will be occur on April 1, 2013.
3.The debt limit increases are a boon even to those who own large amounts of nondischargeable debts. For example, because higher education costs are increasing rapidly, student debt is as well. Even though debtors must prove they would suffer undue hardship if they could not discharge their debts‚ a very high burden‚ they are still counted towards meeting the Chapter 13 debt limits. By increasing the limit, those who have high student loan debt may still be able to file in Chapter 13 in Las Vegas. Fortunately, more recent student debtors may be protected by income-based repayment plans.
4.Anyone ineligible to file for Chapter 13 due to owing more than the debt limit allows are free to file in another chapter, including Chapter 11.
Debt limits are not something anyone considering a Las Vegas bankruptcy should be too concerned about. They are very high, and few people owe this kind of money to anyone. Those who do are often business owners who would likely be able to file for Chapter 11. Consulting a Las Vegas bankruptcy lawyer will help you plan your bankruptcy properly to avoid filing in a chapter in which you are ineligible.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation by calling 702-903-1354.