Adjustments to Bankruptcy Debt Thresholds
Many individual debtors in South Florida are considering a Chapter 13 bankruptcy filing. This is a popular and common type of bankruptcy for individuals because it does not require that the debtor have limited assets or resources (as a Chapter 7 filing does), and it does not require debtors to have all non-exempt assets liquidated as part of the bankruptcy case. In fact, no assets are liquidated in a Chapter 13 bankruptcy. In addition, filing for Chapter 13 bankruptcy and fully completing the terms of the repayment plan can allow you to stop the foreclosure process on your home and to actually catch up on mortgage payments with your service and, ultimately, remain in your home.
In order to qualify for Chapter 13 bankruptcy, you will need to have debts that are below the debt thresholds. The thresholds were recently adjusted in spring 2025, and it is important to know the thresholds in relation to the amount of your secured and unsecured debt so that you can determine your eligibility for filing for Chapter 13 bankruptcy.
New Debt Thresholds or Limits for Chapter 13 Bankruptcy
There are two separate debt thresholds: for secured debt and unsecured debt. During the pandemic, the thresholds were combined into a single debt ceiling, and the amount rose significantly under the CARES Act. However, that increased and combined debt threshold reverted in June 2024, resulting in debtors being required to meet the existing debt limits for secured and unsecured debt. Those debt limits are adjusted every three years for inflation, and the debt ceilings were recently elevated in April 2025.
As of April 1, 2025 and through March 31, 2028, the limit for secured debt is $1,580,125, and the limit for unsecured debt is $526,700. You cannot combine the totals, and then combine the total of your secured and unsecured debt, to qualify for Chapter 13 bankruptcy. To be clear, your secured debt limit must not exceed the $1,580,125 threshold, and your unsecured debt limit must not exceed the $526,700.
What You Can Do If You Have Too Much Debt
If you currently have too much debt to qualify for Chapter 13 bankruptcy, you will likely be able to file for Chapter 11 bankruptcy instead. Although this type of bankruptcy is more complex and costs more to file than Chapter 13 bankruptcy, it is also a type of reorganization bankruptcy with similar benefits to Chapter 13.
Contact a West Palm Beach Bankruptcy Attorney for Assistance
Are you currently considering a Chapter 13 bankruptcy filing? If so, it is extremely important to discuss debt thresholds and the other components of your case with a bankruptcy attorney. If your debts exceed the current thresholds, you can still file for a reorganization bankruptcy but will likely need to do so under Chapter 11. One of the experienced West Palm Beach bankruptcy lawyers at Kelley, Fulton, Kaplan & Eller can speak with you today to assess your eligibility for Chapter 13 bankruptcy and to begin working with you on your reorganization bankruptcy filing. Our firm will be here to represent you from start to finish of your bankruptcy, including the filing of your bankruptcy petition, creating your reorganization plan, and addressing any issues that arise during the course of your bankruptcy case. Contact us today for more information.
Source:
law.cornell.edu/uscode/text/11
