Sometimes in a Bankruptcy case, timing is everything
There are lots of numbers in the Bankruptcy Code: numbers that limit filing under Chapter 13 consumer reorganizations based on the amount of debt that you owe; numbers that determine the amount of your exemptions; and numbers that determine your eligibility for a Chapter 7 filing based on the so called “means test”.
All of these numbers are adjusted for inflation every three years and the new inflation adjusted numbers will be available for use for cases filed after April 1, 2013. The numbers that concern filing limits and exemption amounts will increase by 6.3%. If you have an interest in reviewing the actual numbers you can do so here.
Why are these numbers in the Bankruptcy Code important?
A few examples will help illustrate the point based on the ability to use federal exemptions in states that allow an exemption choice. Many people filing bankruptcy may have equity in a motor vehicle or some money in the bank. After April 1, you will have an additional 6.3% of value in these assets that can be protected. If the issue is equity in a motor vehicle, the protection rises from $3,450.00 to $3,675.00. In the case of the “wildcard exemption” that can be used to protect any property, including cash, based on your total exemption choices you may now have $11,500 stead of $10,825.00
You might be thinking that these are small increases. While the increases are not large, each increase in exemption amounts equals less money or property that might be turned over to a Chapter 7 Trustee or that may be required to be paid into a Chapter 13 Plan of Reorganization.
Exemption planning is complex and vital to a successful case
Experienced counsel is required for anyone thinking about bankruptcy. If there is not an urgent need to file now, you may want to wait until the new numbers may be used for you case.