2013 Bankruptcy Code Inflation Adjustments

This April 1, while Americans enjoyed light-hearted April Fools’ Day fun, an important change in bankruptcy law went into effect. Bankruptcy laws contain certain fixed amounts for exemptions and debt limits. Every three years, these amounts are adjusted for inflation.

In 2013, the bankruptcy inflation adjustment increases by 6.3% the dollar value of exemptions allowed to be claimed, the safe harbor for home owners, and other limits.

One important adjustment involved debt limits for Chapter 13 bankruptcy. To qualify for Chapter 13 bankruptcy, your total secured and unsecured debt must be less than the limits. The inflation adjustment increased the unsecured debt limit from $360,475 to $383,175 and the secured debt limit from $1,081,400 to $1,149,525. The change means you can have more debt and still qualify for Chapter 13 bankruptcy.

The amounts for various exemptions also increased. For example, the motor vehicle exemption increased to $3,675, and the tools of trade exemption increased to $12,250. These changes mean you can protect more property value from creditors while in bankruptcy.

Here is the bottom line — the 2013 inflation adjustments make bankruptcy laws fairer. For those in debt, the change means filing for bankruptcy is easier and more beneficial. And that’s good news for everyone.

At Harold Shepley & Associates, we stay on top of changes to the bankruptcy code so our clients receive the most up to date advice. If you are considering filing for bankruptcy, consult with one of our Pennsylvania bankruptcy attorneys to get the benefit of our experience and knowledge.

By Harold Shepley | Published June 28, 2013 | Posted in Bankruptcy | Tagged 2013 bankruptcy code, debt limits for chapter 13 bankruptcy, exemptions increase, fairer bankruptcy laws, inflation adjustment | Leave a comment