Is There a Minimum or Maximum Amount of Debt I can File Bankruptcy For in New York City?

No matter how much debt you have in New York City there is always a bankruptcy chapter that can help you get a fresh start.  There are no minimum or maximum amounts of debt you can discharge in a Chapter 7 or Chapter 11 case, but Chapter 13 does control the amount of debt that may be eliminated.  Fortunately, these Chapter 13 debt limits increase periodically with inflation, so with the most recent changes now even more people can file for Chapter 13- including very high income earners in New York City.

The current debt limits for Chapter 13 bankruptcy cases in New York City are $383,175 for unsecured debt and $1,149,525 for secured debt.  Chapter 13 is usually for debtors on the verge of foreclosure or repossession, or those with debt types that cannot be discharged in Chapter 7.  Many Chapter 13 filers also need to protect assets that would not be exempt from liquidation under Chapter 7 bankruptcy.  There are some increased protections, but to qualify for a Chapter 13 you will need some disposable income because Chapter 13 requires you to stick to a repayment plan.  The plan will reduce or entirely eliminate many unsecured debts, and will allow you to catch up on secured debts like a mortgage payment or car loans over a period of 3-5 years.  Creditors may not contact you in any way during your repayment plan, and if you have a joint debt with your spouse, then they will be automatically protected as well in your case through the powerful “co-debtor” stay.  While Chapter 13 does have debt limits, it also has some significant advantages that other forms of bankruptcy lack.  The good news is the increased debt limits have made Chapter 13 available to even more debtors in New York City.

Chapter 13, and bankruptcy in general, is not for everyone in debt.  Depending on your situation you may have a better outcome filing Chapter 7, or not filing bankruptcy at all.  But if you are underwater on your bills and worried about the direction of your finances it only makes sense to seek the advice of a professional.  Many bankruptcy attorneys will offer free in-house, online or phone consultations.  Knowledge is power.  Taking a few minutes to understand your options can only help.  If you live in New York City and would like to know what life would be like with a fresh start on your finances please contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free consultation today.  We only practice bankruptcy law and maintain a 99% Chapter 7 bankruptcy discharge record in New York City as of 8/31/16.

**** DISCLAIMER:  This article is intended for educational purposes only.  By reading no attorney-client relationship has been created.  Prior results do not guarantee a similar result for future clients.