Bankruptcy Dollar Amount Adjustments in Effect

On April 1, 2025, new adjusted bankruptcy dollar amounts went into effect and will remain in effect until March 31, 2028. Every three years, there is an automatic adjustment to certain dollar amounts. That automatic adjustment every three years occurs under Section 104 of the US Bankruptcy Code. Any bankruptcy filing that has occurred on or after April 1, 2025 will be held to the new adjusted dollar amounts. There are a wide range of adjustments that occur to various sections of Titles 11 and 28, all with increases to the dollar amount. Our South Florida bankruptcy lawyers can tell you more about some of the key dollar amount adjustments that are likely to affect individuals and businesses considering bankruptcy filings in the West Palm Beach area.

Chapter 13 Bankruptcy Debt Threshold Adjustment

In order for an individual or a sole proprietor to be eligible to file for Chapter 13 bankruptcy, they must have secured debt that does not exceed the threshold amount, as well as unsecured debt that does not exceed the threshold amount. The previous threshold limits were $465,275 in unsecured debt and $1,395,875 in secured debt. Those threshold limits, as of April 1, 2025, are now $526,700 in unsecured debt and $1,580,125 in secured debt.

It is important to be clear that recent dollar amount adjustments have not included any reversion to the pandemic-era increased Chapter 13 debt threshold that combined secured and unsecured debt, and which set the threshold at $2.75 million. That threshold expired on June 21, 2024.

Chapter 11 Dollar Amount Adjustments

In addition to the debt threshold dollar amount adjustments for Chapter 13 bankruptcy, there are also a number of dollar amount adjustments that are relevant to businesses considering Chapter 11 bankruptcy filings.

The debt threshold for a “small business debtor” has increased from 3,024,725 to $3,424,000. For preference claims to be brought against a business defendant, the minimum amount has increased from $7,575 to $8,575. For an involuntary bankruptcy petition to be filed against a business, the claims must total $21,050 (an increase from $18,600). There are a number of other adjustments that may affect a Chapter 11 bankruptcy filing, so it is important to discuss the details of your business bankruptcy with a lawyer in relation to the dollar amount adjustments.

Contact Our West Palm Beach Bankruptcy Lawyers Today

The bankruptcy dollar amount adjustments for 2025 that took effect in April will remain in effect until March 2028. Given that there are a range of adjustments, it is important to speak with a bankruptcy lawyer about how any of the adjustments could have an impact on your bankruptcy filing plans in 2025 and beyond. One of the experienced West Palm Beach bankruptcy attorneys at Kelley, Fulton, Kaplan & Eller can answer any questions you have today and can speak with you in more detail about your particular bankruptcy plans, whether you want to file for bankruptcy as an individual or as a business. Contact us to learn more about the bankruptcy services we provide to individuals and businesses alike in South Florida.

Source:

federalregister.gov/documents/2025/02/04/2025-02207/adjustment-of-certain-dollar-amounts-applicable-to-bankruptcy-cases