Earlier this year, Section 109(e) of the Bankruptcy Code was amended to increase the debt limits for individuals to file for protection under Chapter 13 Bankruptcy to $2,750,000 in total debt, and eliminated the distinction between secured and unsecured debt. Previously, the debt limits capped eligibility for Chapter 13 Bankruptcy at approximately $1,400.000 in secured debt and $425,000.00 in unsecured debt.
As a consequence of this change, business owners who may be burdened with substantial personal guarantees on business debt can now avail themselves of bankruptcy protection in Chapter 13 and avoid many of the administrative burdens posed on individual Chapter 11. This can save thousands in the costs of prosecution as well as streamline the process.
Please bear in mind that each case is unique. If you would like further information, please contact us at 800-479-6330 or 516-873-6330.