What Are the Chapter 13 Debt Limits in South Carolina in 2026?

Understanding the Chapter 13 Debt Limits in South Carolina for 2026

If you are a homeowner or wage earner in Rock Hill, South Carolina, struggling with mounting bills, you may wonder whether Chapter 13 bankruptcy can help you reorganize your finances and keep your property. The answer often depends on whether your total debt falls within current filing thresholds. As of 2026, Chapter 13 debt limits impose separate caps on secured and unsecured obligations under 11 U.S.C. § 109(e). Specifically, your noncontingent, liquidated unsecured debts must be less than $526,700 and your noncontingent, liquidated secured debts must be less than $1,580,125. These figures took effect on April 1, 2025, and replaced lower amounts in place since 2022. For families in York County and surrounding areas, understanding these limits is essential toward meaningful debt relief.

If you are considering filing and want to know whether you qualify, The Howze Law Firm LLC can help you evaluate your options. Call 803-266-1812 or reach out online to schedule a consultation.

How the Current Two-Part Debt Cap Works

Congress temporarily replaced the two-tier system with a single $2,750,000 threshold from June 2022 through June 2024, but that temporary increase has expired, and the separate caps are once again in effect. Under 11 U.S.C. § 109(e), filers must meet separate limits for noncontingent, liquidated unsecured debts ($526,700) and noncontingent, liquidated secured debts ($1,580,125). These figures are adjusted every three years for inflation pursuant to 11 U.S.C. § 104. Bipartisan legislation has been introduced in Congress to restore the higher combined limit, but as of mid-2026, no such bill has been signed into law. You can file Chapter 13 only if your qualifying unsecured debts fall below $526,700 and your qualifying secured debts fall below $1,580,125. Only noncontingent, liquidated debts count toward these thresholds; contingent or unliquidated obligations are excluded. A Rock Hill homeowner with a $300,000 mortgage, $25,000 car loan, and $40,000 in credit card and medical debt would fall well within both limits.

💡 Pro Tip: Before filing, gather every debt statement including mortgage payoff, auto loan balance, student loans, medical collections, and credit cards. Accurate totals prevent surprises during eligibility determination.

Secured vs. Unsecured Debt: Why the Distinction Still Matters

Because the debt limits impose separate caps for secured and unsecured obligations, understanding the difference between these categories is critical to determining your eligibility. Secured debts are backed by collateral, such as a home mortgage or vehicle loan. Unsecured debts, like credit card balances and medical bills, have no collateral attached. Your Chapter 13 bankruptcy attorney in Rock Hill will categorize each obligation accurately because exceeding either cap independently will disqualify you from Chapter 13. Secured creditors generally must receive at least the collateral value, while unsecured creditors may receive only a percentage of what they are owed.

Who Qualifies for Chapter 13 Bankruptcy in South Carolina?

Chapter 13 is available to individuals and sole proprietors with regular income, but not to corporations, partnerships, or limited liability companies. Meeting the debt thresholds is only one piece. South Carolina bankruptcy eligibility also requires demonstrating a reliable income source sufficient to fund a three-to-five-year repayment plan. If you earn wages, salary, commissions, or consistent self-employment income, you may satisfy this requirement.

Additionally, you must receive credit counseling from an approved agency within 180 days before filing. This is a federal prerequisite under 11 U.S.C. § 109(h), and skipping it will result in case dismissal.

The Means Test and Chapter 7 Disqualification

Filers who do not pass the Chapter 7 means test are often directed toward Chapter 13 as a viable alternative. The means test compares your household income against the South Carolina median for your family size. If your income is too high to qualify for Chapter 7 liquidation, Chapter 13 reorganization may be your path forward. Rather than surrendering assets, you propose a court-approved plan to repay creditors over time while keeping your home, vehicle, and other property.

💡 Pro Tip: Even if you think your income is too high for bankruptcy relief, run the numbers with a qualified attorney. Many people overestimate their disposable income once allowable deductions are factored in.

How Long Does a Chapter 13 Repayment Plan Last?

The length of your repayment plan depends on how your gross income compares to the South Carolina median for your household size. If your current monthly income falls below the applicable state median, you may propose a three-year plan, though the court may approve a longer period "for cause." If your current monthly income exceeds the state median, you generally must commit to a five-year plan. In no case may a plan exceed five years under 11 U.S.C. § 1322(d).

This structure gives lower-income filers a shorter commitment while ensuring those with greater ability to pay contribute more over time.

💡 Pro Tip: Your plan payment amount is not static. If your income changes significantly during the plan, you or the trustee can request a modification. Report income changes to your attorney promptly.

Protecting Your Home and Car Through Chapter 13

One of the most powerful benefits of Chapter 13 is the ability to stop foreclosure and catch up on missed mortgage or car payments through the repayment plan. Once you file, the automatic stay immediately halts collection actions, including foreclosure sales and vehicle repossessions. You then have three to five years to cure the arrearage while continuing regular monthly payments going forward.

This makes Chapter 13 particularly valuable for Rock Hill homeowners facing foreclosure. Rather than losing your home, you spread missed payments across the plan’s life. The same principle applies to car loans and other secured debts. As long as you remain current on both plan payments and ongoing obligations, creditors generally cannot take your property.

South Carolina Bankruptcy Exemptions

South Carolina requires filers to use state-specific exemptions, and how long you have lived in the state affects which exemptions you can claim. These South Carolina bankruptcy exemptions protect essential property you need to work and live, such as home equity, a vehicle, clothing, and tools of your trade. Understanding which exemptions apply is critical because they determine what property remains protected during your case.

💡 Pro Tip: Residency requirements for exemptions look back two years before filing. If you recently moved to South Carolina, you may need to use your prior state’s exemptions. Discuss your residency timeline with your attorney.

Chapter 13 vs. Chapter 7: When Reorganization Makes More Sense

Chapter 13 may be the better choice when you want to catch up on a mortgage, keep certain property, or do not qualify for Chapter 7. Chapter 7 is a liquidation process where a trustee may sell nonexempt assets to pay creditors, and remaining eligible debts are discharged. Chapter 13 is a reorganization bankruptcy where you propose a repayment plan and retain your property. For individuals with steady jobs and meaningful assets to protect, Chapter 13 often provides the more strategic path.

Required waiting periods exist between discharge grants depending on chapters involved. If you previously received a Chapter 7 discharge, you generally must wait four years before receiving a Chapter 13 discharge, and you must wait two years between Chapter 13 discharges. These Chapter 13 bankruptcy basics are important to review if you have filed before.

Key Filing Requirements for Chapter 13 in South Carolina

Before your case can proceed, you must satisfy several procedural and substantive requirements under federal bankruptcy law. Below is a summary of core Chapter 13 filing requirements in SC:

• Your noncontingent, liquidated unsecured debts must be below $526,700 and your noncontingent, liquidated secured debts must be below $1,580,125
• You must have regular income sufficient to fund a repayment plan
• You must complete credit counseling from an approved agency within 180 days before filing, per 11 U.S.C. § 109(h)
• You must file all required tax returns for the four years preceding your petition
• You cannot be a corporation, partnership, or LLC

Failing to meet any requirement can result in dismissal. If you have questions about whether you satisfy the debt limits or income requirements, reviewing the unsecured debt limit and qualification criteria may help clarify your situation.

💡 Pro Tip: Gather at least four years of federal and state tax returns before your first attorney meeting. Missing tax returns are a common reason Chapter 13 cases stall or face dismissal.

Frequently Asked Questions

1. What are the chapter 13 debt limits in 2026?

The current limits are $526,700 for noncontingent, liquidated unsecured debts and $1,580,125 for noncontingent, liquidated secured debts. These separate caps took effect April 1, 2025. A temporary combined $2,750,000 limit was in effect from June 2022 through June 2024 but has expired, and pending legislation to restore it has not been enacted.

2. Can I file Chapter 13 if I own a business in Rock Hill?

You may file as a sole proprietor, but Chapter 13 is not available to corporations, partnerships, or LLCs. If your business operates under one of those structures, you would need to explore other bankruptcy chapters for the business entity.

3. How long will my Chapter 13 repayment plan last?

Plan duration depends on your income relative to the South Carolina median. Filers with below-median income may propose a three-year plan, while those with above-median income generally must commit to five years. No plan can exceed five years.

4. Will Chapter 13 stop a foreclosure on my home?

Filing triggers an automatic stay that halts foreclosure proceedings. You can then use the repayment plan to catch up on missed mortgage payments over time while continuing regular monthly payments. However, you must remain current on both the plan and your mortgage to maintain protection.

5. Do I need credit counseling before filing?

Yes. Federal law under 11 U.S.C. § 109(h) requires you complete credit counseling from an approved agency within 180 days before filing. Failing to do so will result in case dismissal.

Take the Next Step Toward Financial Stability

Chapter 13 bankruptcy offers Rock Hill residents a structured way to address overwhelming debt while protecting important assets. The 2026 debt limits, income-based plan durations, and South Carolina exemption rules work together to create a framework for financial recovery. Every situation is different, and the right approach depends on your specific income, debts, and goals.

If you are facing foreclosure, repossession, or persistent creditor pressure, The Howze Law Firm LLC is ready to help you explore your Chapter 13 options. Call 803-266-1812 or contact us today to discuss your path forward.