Understanding the Corrections Act: How It Can Benefit Your Bankruptcy Case
What is the Corrections Act and How Can it Help My Bankruptcy Case? If you live in New York and wanted to restructure your debt through Chapters 11 or 13 bankruptcy, the Corrections Act has, at least temporarily, lifted one of your roadblocks. The Challenge of Debt Limits When it comes to both personal and small business bankruptcy, the options are complete liquidation (Chapter 7) or restructuring your debt (Chapters 11 and 13). The challenge with restructuring is that there are debt limitations imposed. Up until June 21, 2022, individuals with unsecured debts over $465,275.00 and secured debts of over $1,395,875 were ineligible to declare Chapter 13. In expensive real estate markets like the New York metropolitan area, not to mention student loans, business debt, medical debt, and taxes, these limits were easily exceeded. For small businesses that wanted to restructure under Subchapter V of Chapter 11, the debt limit was $2,725,625. If you owed more ...