Chapter 13 eligibility · Beverly Hills
Chapter 13 Eligibility and Debt Limits
Chapter 13 eligibility depends on three things: you are an individual, you have regular income, and your debts are under the federal debt limits. Prior filings and a credit counseling course also matter. Call (310) 362-9071 and we will check each rule with you at a free consultation.
- Only individuals (and married couples) can file Chapter 13, not companies
- You need steady income to fund a plan
- Debt limits for cases filed on or after April 1, 2025: unsecured under $526,700, secured under $1,580,125
At a glance
Who can file Chapter 13
Chapter 13 bankruptcy is open to an individual with regular income whose debts fall under the federal limits. Married couples can file one joint case.
A corporation, LLC or partnership cannot file Chapter 13. A business owner can still file as a person. If you run a sole proprietorship, the business debts are your debts, and they count toward the limits. Business entities look at Chapter 11 and Subchapter V instead.
"Regular income" means income that is steady enough to make plan payments. It does not have to be a paycheck. It can come from:
- Wages or salary, including part-time work
- Self-employment or business income
- Social Security, disability or a pension
- Rental income
- Regular help from a family member who agrees to contribute to the plan
The test is practical. The court asks whether your income is stable enough to keep up with the plan for three to five years. If your income is low or very uneven, Chapter 13 may not fit, and Chapter 7 bankruptcy may be the better path.
The Chapter 13 debt limits
Federal law (11 U.S.C. 109(e)) caps how much you can owe and still file Chapter 13. For cases filed on or after April 1, 2025, the limits are:
| Type of debt | Limit (cases filed on or after April 1, 2025) |
|---|---|
| Unsecured debt (credit cards, medical bills, personal loans, most taxes owed beyond the value of any lien) | Under $526,700 |
| Secured debt (mortgages, car loans, other loans tied to property) | Under $1,580,125 |
These limits may change soon. In 2026, Congress passed a bill (H.R. 7730) that would replace the two limits with one combined limit under $2,750,000, for cases filed on or after the date it becomes law. Ask us which limit applies on the day you file.
Only debts that are "noncontingent" and "liquidated" count. In plain terms, the debt must be fixed and owed, with an amount you can figure out. A disputed claim that no one has put a number on may not count. A personal guarantee on a business loan usually does count once the business has defaulted.
One detail surprises people. If your house is worth less than the mortgage, the part of the loan above the home's value can count as unsecured debt. In Los Angeles, with high home prices and large loans, that can push someone over the unsecured limit.
Other rules that can block a Chapter 13 filing
- Credit counseling. You must take a briefing from an approved nonprofit agency in the 180 days before you file. It can be done by phone or online. See credit counseling and debtor education courses.
- The 180-day bar. If a past case was dismissed because you willfully failed to obey court orders, or you dismissed it yourself after a creditor asked for relief from the stay, you may have to wait 180 days to file again.
- Recent discharges. You can file Chapter 13 at any time, but you cannot get a discharge if you got a Chapter 7 discharge in a case filed in the past 4 years, or a Chapter 13 discharge in a case filed in the past 2 years. A case without a discharge can still save a house from foreclosure.
- Recent dismissed cases. If you had a case dismissed in the past year, the automatic stay may last only 30 days or may not start at all unless the court extends it.
- Tax returns. You must file all tax returns for the past four years before the meeting of creditors.
If your debts are over the limit
Being over the Chapter 13 limits does not mean you have no options. Here is what we look at:
- Chapter 7. Chapter 7 has no debt limit. If you pass the means test, it may work. See our means test evaluation.
- Subchapter V of Chapter 11. Individuals with business debts may qualify for this faster form of Chapter 11. The current limit applied is $3,424,000 (from April 1, 2025).
- Regular Chapter 11. It has no debt limit, but it costs more and takes longer.
- Timing. If the new combined limit becomes law, someone over today's limits may qualify later. We check the status for you.
Common eligibility mistakes
- Counting only the bills you pay each month. Old judgments, personal guarantees and tax debts all count.
- Forgetting the underwater part of a mortgage. It can shift into the unsecured column.
- Filing before the credit counseling course. Without the certificate, the case can be dismissed.
- Assuming income must be a paycheck. Social Security, pensions and family help can qualify.
What it costs
- Chapter 7: flat attorney fee from $1,200, plus the $338 court filing fee
- Chapter 13: attorney fee quoted in writing, and part of it can be paid through the plan
- Payment plans are available, and the first consultation is free
More on Chapter 13 bankruptcy
- Chapter 13 bankruptcy in Beverly Hills
- Chapter 13 Eligibility and Debt Limits
- How a Chapter 13 Plan Payment Is Calculated
- Car Loan Cramdown and the 910-Day Rule
- Changing a Chapter 13 Plan After Filing
- Why Chapter 13 Cases Get Dismissed and How to Avoid It
- Chapter 13 Hardship Discharge
- The Co-Debtor Stay: Protecting a Co-Signer
- Mortgage arrears cure plan
- Second mortgage lien stripping in Chapter 13
- Converting Chapter 13 to Chapter 7
Chapter 13 eligibility questions
What are the Chapter 13 debt limits right now?
The Chapter 13 debt limits for cases filed on or after April 1, 2025 are unsecured debt under $526,700 and secured debt under $1,580,125. A 2026 bill would replace them with one combined limit under $2,750,000 once it becomes law. Ask us which limit applies when you file.
Can I file Chapter 13 if I am on Social Security?
Yes, you can file Chapter 13 on Social Security if the income is steady enough to pay the plan. Social Security, disability and pensions all count as regular income for eligibility.
Can my business file Chapter 13?
No, a business entity cannot file Chapter 13. Only individuals can. A sole proprietor files as a person, and the business debts count toward the limits.
Can I file Chapter 13 right after a Chapter 7?
Yes, you can file Chapter 13 right after a Chapter 7, but you will not get a Chapter 13 discharge if the Chapter 7 case was filed within the past 4 years. People still do this to pay off a mortgage default or tax debt that Chapter 7 did not fix.
What if my spouse does not want to file?
If your spouse does not want to file, you can file Chapter 13 alone. Your spouse's income still goes into the household budget, and the co-debtor stay can protect your spouse on joint consumer debts.
Free consultation
Find out if you qualify for Chapter 13
Call (310) 362-9071 or send the form. Bring a list of your debts and we will check the limits with you for free.
Law Offices of John Asuncion9454 Wilshire Blvd., Penthouse Floor
Beverly Hills, CA 90212
(310) 362-9071
Monday to Friday, 9 a.m. to 6 p.m.