Chapter 13 Jurisdictional Limit Increases April 1, 2013

The jurisdictional limit for chapter 13 bankruptcies increases April 1, 2013.  The allowable debt limit for an individual increases from $360,475.00 to $383,175.00 for unsecured debt and from $1,081,400.00 to $1,149,525.00 for secured debt.

The Chapter 13 payment plan can provide a substantial benefit to many individuals to restructure their debt and make some payment to creditors while saving assets that they would lose in a chapter 7.  For example,  a chapter 13 bankruptcy often can save a home or investment property for an individual. (Corporations are not eligible to file chapter 13.)

One problem in a Fort Lauderdale chapter 13 bankruptcy as in any other chapter 13 is that the bankruptcy code provides a jurisdictional limit.  In other words, if a debtor has too much debt, then he or she is not eligible for chapter 13.  However,  it is recognized in the bankruptcy in the Southern District of Florida that a plan will be confirmed even if the  debtor is above jurisdictional limit if no party objects.  (which is often the case;  creditors as well as debtors would have much larger bankruptcy expense if the debtor has to convert to chapter 11).

(Note in a prior blog post I discussed the issue of how the limits might be able to be combined for a husband and wife with separate debts.)

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