$526,700 Unsecured Debt Limit: Do You Qualify for Chapter 13 in Rock Hill?

Your Financial Fresh Start May Be Closer Than You Think

If you’re drowning in debt, there’s an important number you need to know: $526,700. That’s the new unsecured debt limit effective April 1, 2025, marking a significant increase from the previous $465,275 threshold. For South Carolina residents struggling with overwhelming financial obligations, this adjustment could mean the difference between qualifying for Chapter 13 protection and exploring other options.

Chapter 13 bankruptcy offers a structured path forward, allowing you to reorganize debts and pay what you can afford over three to five years while keeping your assets. First, determine if you qualify under current debt limitations.

💡 Pro Tip: Don’t wait until your debts spiral further out of control. Understanding your options under the new debt limits gives you more choices for protecting your financial future.

If navigating the new Chapter 13 debt limits feels overwhelming, The Howze Law Firm LLC is here to guide you through every step. Don’t let debt weigh you down—reach out to us today and discover your options. Call us directly at 803-266-1812 or contact us online to start paving your path to financial freedom.

Understanding Your Rights Under the New Chapter 13 Debt Limits

The Judicial Conference of the United States recently adjusted bankruptcy debt limits to reflect changes in the Consumer Price Index, resulting in a 13.2004 percent increase. Individuals with regular income can now qualify for Chapter 13 with noncontingent, liquidated, unsecured debts under $526,700 and secured debts under $1,580,125. These limits apply to cases filed between April 1, 2025, and March 31, 2028.

When you work with a chapter 13 lawyer in Rock Hill, they calculate exactly where your debts fall. Noncontingent, liquidated debts have fixed amounts not subject to dispute or dependent on future events—typically credit card balances, medical bills, personal loans, and secured debts like mortgages and auto loans. Disputed debts, unliquidated claims, and contingent obligations may not count against your eligibility limits.

Secured debts are backed by collateral (home mortgage or car loan), while unsecured debts lack collateral backing. Understanding how your debts are categorized determines whether you qualify.

💡 Pro Tip: Keep detailed records of all debts, including current balances, interest rates, and whether they’re secured or unsecured. This documentation is invaluable when determining Chapter 13 eligibility.

The Chapter 13 Qualification Process: What to Expect

Understanding the Chapter 13 timeline is essential. The process begins with evaluating your financial situation and calculating whether your debts fall within current limits.

• Initial consultation and debt calculation (1-2 weeks)
• Credit counseling requirement: Complete approved course within 180 days before filing
• Preparation of bankruptcy schedules and repayment plan (2-4 weeks)
• Filing the petition: Receive immediate creditor protection through automatic stay
• Meeting of creditors: Scheduled between 21 and 50 days after filing
• Plan confirmation: Court decides on repayment plan within 2-3 months (no later than 45 days after the meeting of creditors, which occurs 21-50 days after filing); monthly payments generally begin approximately 30 days after filing the bankruptcy petition (before plan confirmation), and the repayment plan continues for 3-5 years

These new debt limits don’t apply to cases commenced before April 1, 2025. South Carolina bankruptcy courts have specific local rules affecting your timeline, making it essential to work with an attorney familiar with York County practices.

💡 Pro Tip: Start gathering financial documents now. Having tax returns, pay stubs, bank statements, and debt statements organized significantly speeds up the filing process.

Finding Your Path Forward with The Howze Law Firm LLC

The increased debt limits mean more South Carolina residents can access this powerful financial rehabilitation tool. A chapter 13 lawyer in Rock Hill can evaluate your specific situation and determine whether you qualify under the new thresholds. The Howze Law Firm LLC understands bankruptcy law complexities and stays current with all legislative changes affecting debt limits.

Successful Chapter 13 requires developing a realistic repayment plan that satisfies creditors while maintaining a reasonable standard of living. Your disposable income determines your monthly plan payment. Unlike Chapter 7, Chapter 13 allows you to keep property while catching up on missed mortgage or car payments over time.

Experienced bankruptcy counsel maximizes Chapter 13 benefits while ensuring compliance. Certain debts that cannot be discharged in Chapter 7, such as recent tax obligations or domestic support arrearages, can be managed through a Chapter 13 plan. Additionally, stripping off wholly unsecured second mortgages or reducing car loans to vehicle value can provide substantial relief unavailable outside bankruptcy.

💡 Pro Tip: Don’t let embarrassment prevent you from seeking help. Chapter 13 is a legal tool designed to help honest debtors get back on their feet—using it wisely demonstrates financial responsibility.

Navigating the Complexities of Debt Calculation

Determining whether your debts fall within Chapter 13 limits isn’t always straightforward. If you’re a co-signer on a loan where the primary borrower is current, that debt might be contingent and may not count. If you’re involved in ongoing litigation where damages haven’t been determined, those potential obligations might be unliquidated and excluded. Your lawyer helps properly categorize each debt for accurate eligibility determination.

Timing is critical. Debt limits apply when you file your petition, not when you first consult an attorney. Paying down certain debts or resolving disputed claims before filing could help you qualify if you’re close to the limits.

Special Considerations for Business Debts

If you operate a small business or personally guaranteed business debts, calculating eligibility becomes more complex. Personal guarantees on business loans or credit lines count toward your individual debt limits, as do business credit cards or loans in your name. Understanding how South Carolina law treats these obligations is crucial for assessing Chapter 13 eligibility.

💡 Pro Tip: If you have business debts, create separate lists for personal guarantees, business credit in your name, and corporate debts. This organization helps your attorney quickly determine which obligations count toward Chapter 13 limits.

Strategic Planning Under the New Debt Limits

The increased debt limits create new opportunities for financial recovery. With unsecured debt limits rising from $465,275 to $526,700—an increase over $61,000—individuals previously forced to consider Chapter 11 bankruptcy (with higher costs and complexity) may now qualify for the more streamlined Chapter 13 process.

For homeowners, the expanded limits are particularly significant. The new secured debt limit of $1,580,125 provides breathing room for families with substantial mortgage debt who also carry significant unsecured obligations. This is especially relevant in growing areas like York County, where property values have risen dramatically.

Maximizing the Benefits of Higher Limits

Leveraging these new limits effectively requires comprehensive financial planning. A chapter 13 lawyer in Rock Hill can help structure your filing to maximize debt relief while protecting important assets. If you’re close to debt limits, strategic pre-filing planning might involve paying down certain secured debts or timing the filing with resolution of disputed claims.

💡 Pro Tip: Create a month-by-month projection of your income and expenses before meeting with an attorney. This financial snapshot helps determine not just whether you meet debt limits, but whether you can propose a confirmable Chapter 13 plan.

Frequently Asked Questions

Common Concerns About Chapter 13 Debt Limits

Many individuals have questions about how the new debt limits affect their specific situation. Here are answers to common questions.

💡 Pro Tip: Write down all your questions before meeting with an attorney. Understanding every aspect of Chapter 13 bankruptcy helps ensure the best outcome.

Next Steps in Your Chapter 13 Journey

Once you’ve determined you likely qualify under the new debt limits, take concrete steps toward financial recovery. Remember that you must complete your review of 11 USC 109 bankruptcy eligibility requirements beyond just debt limits.

💡 Pro Tip: Start a bankruptcy journal documenting your financial situation and creditor contacts. This record will be invaluable throughout your case.

1. What happens if my debts are right at the $526,700 unsecured debt limit?

If your unsecured debts are close to the limit, precise calculation becomes critical. Your attorney will carefully review each debt to determine its exact amount and whether it qualifies as noncontingent and liquidated. Sometimes, negotiating with creditors before filing can bring you safely under the threshold.

2. How do the new secured debt limits of $1,580,125 affect homeowners with multiple properties?

The secured debt limit includes all secured obligations, not just your primary residence. If you own multiple properties, all mortgages, home equity loans, and property-secured debts count toward the $1,580,125 cap. Chapter 13 may still offer benefits like catching up on mortgage arrearages and potentially stripping off wholly unsecured junior liens.

3. Can married couples combine their debt limits when filing jointly?

No, debt limits remain the same whether you file individually or jointly. However, filing jointly can offer other advantages, such as protecting both spouses from creditors and potentially increasing property exemptions available. The decision requires careful analysis of both spouses’ debts, assets, and income.

4. What if my debts exceed the Chapter 13 limits after April 1, 2025?

If your debts exceed current Chapter 13 limits, Chapter 11 bankruptcy remains available, including Subchapter V for small business debtors with debts under $3,424,000 (as of April 1, 2025). Some individuals may qualify for Chapter 7 if they pass the means test. Alternatively, consider non-bankruptcy options like debt negotiation.

5. How long do I have to take advantage of the new debt limits?

Current debt limits of $526,700 unsecured and $1,580,125 secured apply to cases filed between April 1, 2025, and March 31, 2028. After that, limits will likely be adjusted again based on Consumer Price Index changes. These adjustments occur every three years.

Work with a Trusted Chapter 13 Bankruptcy Lawyer

Navigating Chapter 13 bankruptcy requires comprehensive understanding of bankruptcy law, local court procedures, and strategic financial planning. Recent changes to debt thresholds have opened doors for many South Carolina residents who previously didn’t qualify for Chapter 13 relief. Whether you’re facing foreclosure, overwhelming medical debt, or struggling with credit card balances, understanding your options under the new limits is the first step toward financial recovery. An experienced bankruptcy attorney can evaluate your unique situation, ensure accurate debt calculation, and develop a strategy that maximizes Chapter 13 benefits while protecting your interests.

Take control of your financial future and explore the opportunities brought by the new Chapter 13 debt limits with The Howze Law Firm LLC. Reach out for guidance and start navigating your path to stability today. Give us a call at 803-266-1812 or contact us to discuss your options.