Dollar Amount Adjustments for Chapter 7 and Chapter 13 Bankruptcy

On April 1, 2013, the Judicial Conference of the United States published increased dollar amounts throughout the Bankruptcy Code. These amounts affect many aspects of bankruptcy, including what items of property you can keep (through exemptions), whether you can qualify for Chapter 7 or Chapter 13 bankruptcy, cash advance and luxury good charges on your credit card that will land you in trouble, and more.

These amounts are adjusted every three years based  on the Consumer Price Index. This round of changes increased all of the numbers by 6.3%. The next adjustment will occur on April 1, 2016.

Here are some highlights:

Higher Means Test Thresholds

The increased numbers make it easier for people to pass the means test and qualify for  Chapter 7 bankruptcy.

Federal Exemptions

The federal bankruptcy homestead exemption amount increased from $21, 625 to $22,975.

The federal motor vehicle exemption amount increased from $3,450 to $3,675.

All other federal exemption amounts increased.

Debt Limits to File for Chapter 13 Bankruptcy

The debt limit for eligibility for Chapter 13 bankruptcy increased. You can now qualify for Chapter 13 if your secured debts are below $1,149, 525 (previously it was $1,081,400) and your unsecured debts are below $383,175 (previously it was $360,475).

Increased Limit for Recent Credit Card Charges That are Nondischargeable 

If you have charged more than $650 in luxury goods within 90 days of your bankruptcy filing or taken out more than $925 in cash advances within 70 days of your bankruptcy filing, those charges will be presumed to be nondischargeable (meaning you will not be able to get rid of them in bankruptcy). These limits were increased from $600 and $875 respectively.

(Learn more in Recent Luxury Purchases and Cash Advances in Bankruptcy.)

A list of the dollar amount adjustments can be found n the the Federal Register