Section 109(e) of the Bankruptcy Code provides what are known as the “debt limits” for Chapter 13 bankruptcy cases. It provides that only a person whose debts are less than a certain amount may file a Chapter 13 case.
As of April 1, 2013, those limits have changed. For cases filed April 1, 2013 and later, the limits are now $1,149,525.00 for secured debt (up from $1,081,400.00) and $383,175.00 for unsecured debt (up from $360,475.00).
Usually, secured debts are mortgages and car loans, which are “secured” by the house or car. Unsecured debts are basically everything else. If you have debts in either category over the limits, you are ineligible to file a Chapter 13 Case.
The 109(e) debt limits play somewhat more of a role here in the San Francisco Bay Area than they do in other parts of the country, due to the comparably high housing values and mortgages. This increase in the limit should prevent a significant number of people from being forced into a different chapter.
If you are considering filing a bankruptcy case, but have debts that are still higher than the new limits, you should speak with a qualified attorney about your alternatives.