Bankruptcy Dollar Limits Expected to Ease April 1, 2013

increasing profitsIt will be a little easier for the debtor in bankruptcy when an adjustment in limits and formulas occurs on April 1.  There will be modest increases in the chapter 13 debt limits, in means test formulas and federal exemptions when the once-every-three-year adjustments for inflation go into effect.

These numbers are not an issue for most Kansas debtors.  But a debtor on the margins of these limits and formulas may benefit from waiting to file bankruptcy after April 1.  Your bankruptcy attorney can make sense of these complicated numbers for you.

Erich Fabricius is predicting a 6.3% increase which is slightly less than the increase three years ago when the figures last changed.  Closer to April 1, the government will announce the actual figures that will go into effect.

The unsecured debt limit for chapter 13 bankruptcy is estimated by Fabricius to be $383,175. The current limit is $360,475. A person with debts with no collateral in excess of the limit is ineligible for chapter 13 relief.

The debt limitation for family farmers in Chapter 12 increases from $3,702,650 to $4,031,575.

The homestead equity limit increases from $146,450 to $155,675 though many Kansans have higher homestead limits under state law. Federal exemptions increase but most Kansans do not use the federal exemptions.

Abuse in chapter 7 for excess disposable income will be more difficult for the U.S. Trustee to prove with the new, higher limits on the means test.

 

Credit: Microsoft Office Clipart

 

About Jill Michaux

Jill Michaux is a Kansas bankruptcy attorney. She can be found on Google+. She and her partner, Mark Neis, are Topeka's only board certified consumer bankruptcy law specialists.