This week’s Win Wednesday brings exciting news for individuals who previously had too much debt to qualify for Chapter 13 bankruptcy!
On November 10, 2026, the President signed the Bankruptcy Threshold Adjustment Act into law, permanently increasing the debt limits for Chapter 13 bankruptcy. This change makes Chapter 13 available to more individuals who were previously unable to use this option because of the amount of debt they owed.
Previously, Chapter 13 had separate limits for secured and unsecured debt. Under the new law, those limits are replaced with one combined debt limit of $2.75 million. This means individuals with qualifying debts below the new limit may now have access to Chapter 13, even if they previously exceeded one of the old limits.
What does this mean for our clients?
One of our clients has more than $600,000 in student loan debt. Under the previous debt limits, the amount of debt made them ineligible for Chapter 13. Their only potential reorganization option would have been Chapter 11, which can be a more complicated and costly process.
With the new law in effect, that has changed!
Our client can now pursue Chapter 13 bankruptcy, creating an opportunity to establish a manageable repayment plan based on their financial circumstances and address other qualifying debts through the bankruptcy process. This can also provide an opportunity to eliminate a significant portion of eligible debt.
This is a meaningful change for individuals who need a structured way to address substantial debt but previously had limited options.
At Walker & Walker, we are excited about what this change means for our clients. Bankruptcy laws evolve, and sometimes those changes create opportunities that were not available before.
A new law can mean new possibilities, and this week’s Win Wednesday is a great example!
