Bankruptcy Lawyer | Be Aware of the Chapter 13 Debt Limits

Bankruptcy Lawyer  |  For many Bakersfield, CA, residents, Chapter 13 bankruptcy provides a great opportunity to gain debt relief. As any good bankruptcy lawyer knows, however, Chapter 13 filings don’t erase people’s obligation to repay their debts. There are also restrictions on who’s eligible to file in the first place. Here are some of the basics consumers should understand.

Chapter 13 Essentials

Chapter 13 bankruptcies are sometimes referred to as wage earner’s plans. These filings are designed to help traditional workers and the self-employed repay their debts in part or in full. Debtors submit proposed three- to five-year plans for how they’ll complete repayment.

Debt Limits and Eligibility

To be eligible to file for Chapter 13, the value of an individual’s debts must not exceed specific maximums. These limits are $394,725 in unsecured debt and $1,184,200 in secured debt.

Other eligibility rules include prohibitions on filing within 180 days of a previous bankruptcy denial or voluntary dismissal. Most debtors also need to obtain credit counseling from approved agencies.

The Practical Realities of Eligibility Restrictions

Although the numeric debt limits for Chapter 13 bankruptcy are predetermined by law, they may be adjusted over time. Debtors must start by organizing their debt to increase the chances that their filings will succeed.


For instance, it’s important to divide one’s debt based on which classification it falls under. A bankruptcy lawyer may recommend Chapter 13 tactics like lien stripping to convert a mortgage to unsecured debt and stay within the limits. Other debts must be documented in the filing yet don’t count towards the maximums. These include debts classified as unliquidated, or unable to be readily resolved, and those known as contingent, or not payable unless specific events occur.

Our office can assist you in determining whether bankruptcy is the right choice for you, and which chapter under the Bankruptcy Code would provide you with the most relief.  To schedule a free consultation with a knowledgeable Bakersfield bankruptcy lawyer about filing a Chapter 7 bankruptcy in Kern County, please call our office today at 661-888-4335 .