Geez, I haven’t posted anything in the last 5 months, so I’ve got some catchin’ up to do! Interest rates, the dollar amounts for various provisions in the Bankruptcy Code, and means test data have all recently changed. Also, the CARES Act allowing plans to be extended to 84 months for Covid-related reasons expired on March 27, 2022.
WSJ Prime Rate: The prime rate has changed twice so far this year:
- March 16, 2022: 3.5%
- May 4, 2022: 4.0%
IRS Interest Rate: The rate of interest payable on secured tax claims is 4%, effective April 1, 2022.
Generally the applicable interest rate to be paid on secured claims through the chapter 13 plan is determined as of the date of confirmation.
Exemptions: The dollar amount of federal exemptions increased as to cases filed on or after April 1, 2022. Some of the more common exemption amounts are:
- 522(d)(1) Homestead: $27,900
- 522(d)(2) Motor vehicle: $4,450
- 522(d)(3) Household goods: $14,857
- 522(d)(4) Jewelry: $1,875
- 522(d)(5) Wildcard/unused homestead: $1,475/$13,950
- 522(d)(6) Tools of the trade: $2,800
- 522(d)8) Life insurance contract: $14,875
- 522(d)(11)(D) Personal injury: $27,900
Debt Limits for Chapter 13: The debt limit for section 109(e) eligibility purposes increased as to cases filed on or after April 1, 2022.
- Unsecured debts: $465,275
- Secured debts: $1,395,875
Median Income; “Means Test” Standards: The median income data increased as to cases filed on or after April 1, 2022. The IRS standards for allowable living expenses are increasing as to cases filed on or after May 15, 2022. Updated and historical data is available at https://www.justice.gov/ust/means-testing.
Sunset of CARES Act: The CARES Act, which permitted debtors to extend their chapter 13 plans to 84 months for Covid reasons as discussed here, expired on its own terms on March 27, 2022.
Disclaimer: These posts represent my thoughts and opinions and do not constitute legal advice, nor should they be considered a substitute for legal research. Read the Bankruptcy Code and conduct your own research. Do not rely solely on the information provided in this or any other post.
P.S. Don’t forget to register for the UK Consumer Bankruptcy Law Conference to be held on June 9-10, 2022, at the Campbell House in Lexington!