109(e)—Ch. 13 Eligibility. To be eligible, debtor (or debtor and spouse, except a stockbroker or commodity broker) has to meet following requirements:
a. must have regular income (courts tend to be liberal in construing this).
b. must have non-contingent, liquidated, unsecured debts of less than 290,525.
c. must have non-contingent, liquidated, secured debts of less than 871,550.
d. Note: Non-contingent and liquidate include tort debt that is being appealed.
e. Note: May be able to argue that a guarantee is contingent debt and so shouldn’t be included in either above equations, unless the person for which guaranty made has defaulted.
f. Note on guaranteeing loan secured by prop: If guaranteeing loan secured by prop worth less than debt, then may bifurcate claim to fit under limits. Ex—900k loan secured by 700k prop. That is 700k secured loan and 200k unsecured. May be arg that guarantee is not secured debt at all—but, could argue that the underlying debt is secured, and guarantor is subrogated to rights of the creditor.
g. Note: Way to work around this if you have too much unsecured debt—may give an unsecured party a security interest in something to bring unsecured debts down to level where it becomes possible to file.
h. Note: If party has too much secured debt to file, may try to sell it first.
i. Note: If debtor is ½ owner of prop subject to security interest, need to look at deed to figure out if entire amount should be allocated to him to determine eligibility.
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