The New Dollar Amounts Are Out

Every three years, many of the dollar amounts in the Bankruptcy Code are adjusted to reflect inflation and cost of living factors.  The Judicial Conference has just released the changes in these dollar amounts that will become effective on April 1, 2013.

Note specifically that the eligibility for Chapter 13 will change such that liquidated, noncontingent unsecured claims must be less than $383,175 (currently $360,475) and secured debts will have to be less than $1,149,525 (currently $1,081,400).

Other changes of specific interest are modifications to the federal exemptions and the dollar amounts that are the permitted deductions in Section 707(b).  While most practitioners rely on computer software servicers to keep them updated with this information, many should examine these new amounts closely to determine whether they will change the eligibility of a potential debtor  for Chapter 13 relief or whether by waiting until April 1 for a filing, the presumption of abuse might be avoided.

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