When debts pile up and are out of control, many people consider filing for Chapter 13 bankruptcy. This is a good option for those who are able to pay off most of their debts if given more time or if a better debt repayment plan can be negotiated with creditors. However, there are limits to the amount of debt that an applicant for this type of bankruptcy can renegotiate.
For unsecured debt, the total amount must be less than $394,725. For secured debt, the total amount must be less than $1,184,200. Unsecured debt is debt that does not give the creditor the right to take your property in payment for the debt. This includes credit card debt, medical debt, personal loans and some types of student loans. Secured debt is debt for which a creditor may take possession of your personal property as payment for the debt if you default. Examples of secured debt include mortgages, car loans, and furniture.
Exceptions to Chapter 13 Debt Limitations
Chapter 13 debt limitations were initiated during the 1970’s to ensure that real estate developers did not take advantage of the benefits offered by Chapter 13 bankruptcy. However, there are some debts that do not count toward the total amount of debt that is used to reach the debt limitation amount. If you have debt that exceeds this amount, an experienced New York state bankruptcy lawyer can evaluate your unique case to determine whether some of your debt is an exception. Some of the types of debt that are not added to the total debt limitation amount include liquidated debts, which are debts in which the owed amount is not yet known, as in a personal injury lawsuit, or debts that have accrued as a result of the breach of a contract.
Call to Schedule a Free Consultation With a New York State Bankruptcy Lawyer Today
If you are considering filing for Chapter 13 bankruptcy, call to schedule a free consultation with a Long Island bankruptcy attorney today. At the Law Offices of Scott R. Schneider, we will thoroughly evaluate your case to determine the total amount of your debt and get you the best outcome. We serve the cities of Long Island, Melville, Lindenhurst and surrounding Nassau and Suffolk County communities. Visit our website at https://nassaubankruptcyattorney.com or call us at (516) 433-1555. We will give you legal guidance you can trust.
Better Business Bureau
Bankruptcy Practice Spotlight
If you are facing a possible foreclosure, I can take my two-plus decades of experience to help you save your house.
I understand how stressful the prospect of losing a house can be and am committed to working one-on- one with you to understand all details involved in your financial situation.