For both debtors and creditors, numbers are important in bankruptcy proceedings. The United States Judicial Conference has announced that certain dollar amounts and dollar limits in the United States Bankruptcy Code will increase effective April 1, 2022.
Adjustments must occur every three years in accordance with 11 USC Â§104. The new dollar amounts reflect an average increase of approximately 11%.
Here is a summary of some important adjustments:
- Exemptions: The dollar amounts limiting the exemptions an individual debtor can choose to protect their assets from creditors and the trustee in bankruptcy will increase under 11 USC Â§522. For example, an individual can exempt up to $27,900 of an interest in real estate or personal property used as a residence (compared to $25,150 previously). As a result, a married couple who files for bankruptcy can exempt up to $55,800 of equity in jointly owned real estate.
- Wage demands: The claim limit for priority employees (that is, any claim for wages, salaries or commissions) will be increased from $13,650 to $15,150. 11 USC Â§507(a)(4).
- Farmers: A family farmer can file for Chapter 12 with total debts of less than $11,097,350 (down from $10,000,000 previously). 11 USC Â§101(18).
- Chapter 13: A person can file for Chapter 13 as long as their non-contingent and liquidated unsecured debts are less than $465,275 and the secured debts are less than $1,395,875 (down from $419,275 and $1,257,850). 11 USC Â§109(e).
- Preferences: The minimum amount a trustee can attempt to recover in cases of non-consumer preferential transfers will increase from $6,825 to $7,575. 11 USC Â§547(c)(9).
- Involuntary deposits: The minimum aggregate claims threshold for an involuntary Chapter 7 or Chapter 11 bankruptcy filing by creditors will increase from $16,750 to $18,600.
A summary of all adjustments can be found in the Federal Register published on February 4, 2022.