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Are there debt limits for Chapter 13 bankruptcy?

Additional Information:

We have two mortgages on the house and owe a total of $800,000.  The house is currently appraised at around $500,000. The first mortgage is for $550,000. Are there debt limits for a Chapter 13 bankruptcy and will we have too much debt to take advantage of bankruptcy?


There are debt limits for a Chapter 13 filing, but they may not apply to you.   The current maximum debt limits for an individual Chapter 13 debtor are $360,475.00 for unsecured debts and $1,081,400.00 in secured debts.  In some cases, a second or third mortgage that is totally “underwater” (a mortgage is totally underwater when the first mortgage holder is owed more than the property is worth) may be deemed to be unsecured.  So, if you add your second mortgage to your other unsecured debt and the total is over $360,475.00, then it’s possible you may be ineligible for a Chapter 13 bankruptcy.   These limits are subject to annual cost of living increases and may change depending on the timing of your case filing.  Additionally, if you are filing a joint Chapter 13 case, the limits may double depending on the circumstances.  In any event, you should consult with a competent Massachusetts bankruptcy attorney and develop an effective strategy to assist you in restructuring your financial affairs. 

Esher-Rossi, the Bankruptcy Lawyers in Boston concentrate their practice in bankruptcy and insolvency matters. Our bankruptcy attorneys serve consumers and businesses throughout the state of Massachusetts with offices located in downtown Boston, the Boston Metrowest town of Framingham, and  Provincetown, Cape Cod.



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