The Bankruptcy Code is full of specific dollar limitations and allowances. These figures include dollar limits on eligibility for use of Chapter 13 and many other amounts, such as the value of exemptions permitted to bankruptcy debtors under 11 USC §522. All of these dollar amounts are adjusted by the amount of change in the Consumer Price Index for All Urban Consumers in the manner set out in 11 USC §104(a), a part of the bankruptcy code. The adjustment occurs every three years on April 1st and is based on the amount of change that has occurred over the previous three years ending December 31 the year before the adjustment. Dollar amounts are rounded to the nearest $25 and the adjustment applies to other limits set forth in the bankruptcy code.
Well, it is that time of year for an announcement of the change and 2016 is a year when the changes are made as of April 1st. The Judicial Conference of the United States has just released a notice of the changes proposed to come into effect for cases filed after March 31, 2016. It looks like Chapter 13 cases will now be permitted for individuals with unsecured debts of no more than $394,725 and secured debts of no more than $1,184,200 for cases filed April 1, 2016, and later. This is an increase of more than $11,000, only about half the increase announced in 2013 for unsecured debt. Secured debt increased by about $35,000 over the Chapter 13 limit imposed April 1, 2013.
In states where federal exemptions are allowed, such as Oregon, the federal homestead exemption will be increased from $22,975 to $23,675 per person. The federal exemption for a car will rise from $3,675 to $3,775. Under the statute, if the amount is increased it will go up by at least $25. While many states have opted out of federal exemptions and limit bankruptcy exemptions to those provided in state statute, many other dollar amounts apply to all cases filed in bankruptcy court. Federal exemptions were allowed in Oregon as of July 1, 2013. These new dollar figures will only come into play for filings after the effective date, but they may allow filings that were previously impermissible.