For a few years, Chapter 13 had a simple rule: one combined debt limit of $2.75 million, and if your total debts fit under it, you could file. That shortcut is gone. It expired on June 21, 2024, and I still meet people — and occasionally see filings — that assume it’s still around. It isn’t. The old separate caps are back, and if you trip either one, Chapter 13 is off the table entirely.
The Two Caps That Control Now
Under 11 U.S.C. § 109(e), for cases filed from April 1, 2025 through March 31, 2028, you qualify for Chapter 13 only if you owe less than $526,700 in noncontingent, liquidated unsecured debt and less than $1,580,125 in noncontingent, liquidated secured debt. Both tests have to pass. It doesn’t matter if your total is well under the old $2.75 million figure — if either category crosses its own line, you’re out.
Plain English on the terminology: secured debt is debt tied to property — your mortgage, your car loan. Unsecured debt is everything else — credit cards, medical bills, personal loans. “Noncontingent and liquidated” basically means the debt actually exists now and the amount can be determined, as opposed to a possible future obligation or a claim whose value is genuinely in dispute. Those definitions matter at the margins, and they get litigated — but for most people the math is straightforward.
How This Trips People Up in Northeastern Pennsylvania
The secured cap is the one to watch here. Take a homeowner in the Wilkes-Barre or Scranton area with a large mortgage — or two, if there’s a home equity line — plus a couple of car loans. Now add a second property, an inherited house with a lien, or a mortgage on a small rental. The secured number can creep toward $1.58 million faster than people expect. On the unsecured side, it usually takes something big — a failed business with personal guarantees, a large judgment, or very heavy medical and card debt — but it happens.
Here’s the honest consequence if you exceed a cap: your alternative is Chapter 11, which is built for businesses and is dramatically more expensive, slower, and more complicated for an individual. Some people can restructure how debts are counted before filing — a genuinely disputed or unliquidated debt may not count the same way — but that’s a legal analysis, not an accounting trick, and doing it wrong gets cases dismissed.
What This Means for You
If your debts are large in either category, eligibility has to be checked before anything is filed, with the secured and unsecured totals calculated separately. Don’t rely on the $2.75 million figure if you see it on a website — a lot of pages haven’t caught up. And don’t assume you’re under the caps just because your total debt sounds manageable; it’s the split that counts.
Check Your Chapter 13 Eligibility First
Call the Law Offices of Jason P. Provinzano, LLC at 570-822-5771 for a free consultation at 16 W. Northampton Street in Wilkes-Barre. Bring your mortgage statements and a list of your debts, and we’ll add up your secured and unsecured totals against the current § 109(e) limits — so you’ll know whether Chapter 13 is actually available to you, and if it isn’t, what your real options are.
This article is general information about bankruptcy law, not legal advice about your specific situation.
