Inflation Adjusted Dollar Amounts

Dollar Amounts Adjusted in Code and Forms

The Judicial Conference of the United States recently published increases to the federal exemptions and to dollar amounts throughout the Bankruptcy Code[1] effective for cases filed on and after April 1, 2016. Adjustments are made at three-year intervals to reflect changes in the Consumer Price Index. Amounts affected by these changes include:

  • allowable debt limits for filing under Chapter 13 (11 U.S.C. 109(e));
  • minimum aggregate claims needed for the commencement of an involuntary bankruptcy (11 U.S.C. 303(b));
  • priority expense and claim amounts (11 U.S.C. 507(a));
  • federal bankruptcy exemptions (11 U.S.C. 522(d));
  • limits on the lien avoidance power (11 U.S.C. 522(f)(3) and (4));
  • homestead exemption cap amounts (11 U.S.C. 522(p) and (q));
  • non-dischargeable spending in consumer cases (11 U.S.C. 523(a)(2)(C));
  • preference thresholds in non-consumer cases (11 U.S.C. 547(c)(9)); and
  • means-testing thresholds (11 U.S.C. 707(b)).

The revised dollar amounts were published in the Federal Register on February 22, 2016. In addition, the following official forms, director’s forms, and instructions will change effective April 1 to reflect the above increases:

  • Official Form 106C, The Property You Claim as Exempt, Line 3
  • Official Form 107, Your Statement of Financial Affairs for Individuals Filing for Bankruptcy, Line 6
  • Official Form 122A-2, Chapter 7 Means Test Calculation, Lines 29 and 40
  • Official Form 122C-2, Chapter 13 Calculation of Your Disposable Income, Line 29
  • Official Form 201, Voluntary Petition for Non-Individuals, Line 8
  • Official Form 207, Statement of Your Financial Affairs, Lines 3 and 4
  • Official Form 410, Proof of Claim, Line 12
  • Director’s Form 2000, Required Lists, Schedules, Statements, and Fees, Pages 2, 3, and 4
  • Director’s Form 2830, Chapter 13 Debtor’s Certifications Regarding Domestic Support Obligations and Section 522(q), Part III
  • Instructions for Individual Debtors, Pages 8 and 22
  • Instructions for Non-Individual Debtors, Page 12
  • Director’s Form 2500E, Instructions, Page 1

State Exemption Changes

California, Indiana, Maryland, and Ohio state exemptions also are adjusted periodically for inflation. The California Judicial Council publishes inflation-adjusted dollar amounts of the state’s regular and special exemptions[2], and the Ohio Judicial Conference issues inflation-adjusted homestead and personal property exemptions at three-year intervals coinciding with the federal interval.

The Maryland homestead exemption is automatically adjusted upward to the federal limit. Although Maryland has opted out of the federal exemptions, Sec. 11-504 of the state homestead exemption law was amended effective October 1, 2011, to increase the state exemption for real property to the amount allowed under the federal homestead exemption.

The inflation-adjusted exemptions for Ohio and Maryland are reflected in Best Case and may be selected by changing the filing date to April 1, 2016 or thereafter. The California Judicial Council is expected to publish adjustments to the state’s exemptions before April 1. The adjusted amounts will be included in Best Case soon after they are made available by the Judicial Council and on April 1 for CINcompass users.

The Indiana Department of Financial Institutions publishes adjustments to the state homestead and wildcard exemptions every six years. The current dollar amounts became effective on March 1, 2016, and are available in Best Case and CINcompass for cases filed on and after that date.

1The venue provision for trustee avoidance actions in 28 U.S.C. 1409(b) also is being adjusted for inflation.

2California offers debtors alternative property exemptions. Regular judgment exemptions under Code of Civil Procedure §704.010 et seq., and exemptions under Code of Civil Procedure §703.140(b) that are substantially similar to the federal exemptions.

About the Author:

George Basharis, JD

George Basharis, J.D. is a practicing bankruptcy attorney in the Northern District of Illinois. He has represented dozens of individuals and small businesses in federal bankruptcy proceedings and related matters. George also advises the CINgroup on a variety of aspects regarding bankruptcy law. He has authored books, white papers, customer newsletters and conducted speaking engagements regarding bankruptcy.