When your debt becomes too difficult to manage, bankruptcy may offer a way to regain financial stability, but not every chapter is available to every filer. One of the first factors that shapes your options is how much you owe. Chapter 13, which allows you to reorganize your debts and keep your property, is available only if your debts fall below set limits. That is why the debt limits when filing for bankruptcy are important when considering your options in Miami.
The rules are more flexible than many people expect, and the limits are high enough that most individual filers qualify. Still, debt calculations can determine whether you qualify. A bankruptcy lawyer can help you determine each debt’s classification and how those classifications may affect your filing options.
Chapter 13 bankruptcy allows you to keep your home and other property while you repay debts through a manageable plan, but it comes with limits. Under Section 109(e) of the U.S. Bankruptcy Code, you qualify only if your noncontingent, liquidated debts remain below two separate limits. For filings through March 2028, those limits are $526,700 in unsecured debt, such as credit cards and medical bills, and $1,580,125 in secured debt, such as a mortgage or car loan. Please confirm the current debt limits when you speak with an attorney.
Inflation indexing adjusts the limits on a three-year cycle. For most people considering a bankruptcy filing in Miami, these debt thresholds are comfortably high, but they may present a hurdle if you have a large mortgage or significant business debt. If you approach either threshold, you will need an accurate count, and a bankruptcy attorney can help tally the debts correctly.
No. Chapter 7 bankruptcy, which discharges qualifying debts without a repayment plan, does not set a debt limit. Instead, it screens out filers by income. Under Section 707(b), a means test will compare your household income with the state median, and measure disposable income to determine eligibility.
This difference is crucial when your debt is high. If you owe too much for Chapter 13, you may still qualify for Chapter 7 if the means test permits it. For people considering a bankruptcy filing, Chapter 13 debt thresholds and Chapter 7 income requirements distinguish the two chapters.
The limits count only certain debts. Contingent debts, such as debts involving an unresolved lawsuit, and unliquidated debts, whose amounts remain uncertain, generally do not count toward the Chapter 13 threshold. That means a debt you assume would disqualify you may not count toward the threshold.
Because these rules are based on each obligation’s classification, a careful review can determine whether you qualify. A skilled lawyer may examine your debts, separate what counts from what does not, and identify the chapter that may best fit the filing. When you file for bankruptcy in Miami, the applicable debt limits can affect whether the filing proceeds without delays or dismissal.
The debt limits when filing for bankruptcy in Miami determine whether Chapter 13 is available, and debt classification may affect your eligibility. This information can help you evaluate your filing options. At Werner, Hoffman, Greig & Garcia, we can review your debts, explain which chapters may apply, and prepare your filing in the proper way. Call us today to schedule your free initial consultation.
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