Maryland Chapter 13 Debt Limits 2026

What Are the Current Chapter 13 Debt Limits?

The 2026 Chapter 13 debt limits in Maryland determine who’s eligible to file for this type of court-approved repayment plan. Congress set these maximums so the process serves individuals and families rather than large commercial enterprises. For any case filed between April 1, 2025, and March 31, 2028, the law draws a hard line on the total amount a filer can owe. You can’t exceed $1,580,125 in secured obligations or $526,700 in unsecured obligations if you want to proceed under this chapter.

The federal bankruptcy code automatically updates these figures every three years to account for inflation. So if you’re checking numbers you found in 2023 or early 2024, they’re already outdated. Always confirm you’re working with the current cycle’s figures before making any decisions. 

What Counts as Secured, Unsecured, Contingent, and Unliquidated Debt?

Secured Debt

Secured debt is any financial obligation backed by a specific piece of collateral. When you sign a mortgage or an auto loan, the lender retains the right to repossess the property if payments stop. These property-backed balances count directly toward the $1,580,125 cap. If your home carries a hefty mortgage and you’ve got two financed vehicles in the driveway, those combined totals can push you toward the federal ceiling faster than most people expect. And here’s a detail that trips people up: the number that matters is the current payoff amount, not the original loan balance.

Unsecured Debt

Unsecured debt covers financial obligations that aren’t tied to any physical property or collateral. Think credit card balances, medical bills, student loans, and most standard personal loans. Sometimes a secured debt becomes partially unsecured if the collateral is worth significantly less than what’s owed (picture a car worth $12,000 securing a $20,000 loan; that $8,000 gap is technically unsecured). This category has a much lower ceiling, capping filers at $526,700 in total unsecured obligations. Because unsecured debts can pile up quickly due to high interest rates, especially on credit cards charging 25% or more, many struggling consumers find themselves closer to this limit than they’d expect.

Contingent and Unliquidated Debt

Contingent and unliquidated obligations play by different rules under the bankruptcy code and don’t count toward the eligibility caps. A contingent debt relies on a specific future event that may or may not happen. For example, if you co-signed a car loan for a relative who’s currently making all their payments on time, your liability is contingent; it only becomes real if they stop paying.

Unliquidated debts are claims for which the exact dollar amount hasn’t been determined or agreed upon yet. An unresolved personal injury lawsuit filed against you is a textbook example, because the damages remain unknown until a settlement or verdict. You still have to disclose both types in your bankruptcy paperwork, but they won’t inflate the number that determines your eligibility.

Why Do These Limits Matter More for Maryland Households Right Now?

Plenty of Maryland residents rely on Chapter 13 bankruptcy to halt aggressive collection actions, stop foreclosures, and prevent vehicle repossessions. But recent economic data suggests that financial distress is spreading across several key regions in the state. According to market data, foreclosure hot-spot events were up roughly 30% year over year in the third quarter of 2025 in Prince George’s County, Baltimore City, and Baltimore County. On top of that, Maryland households are dealing with higher utility costs and broader affordability pressures, as The Baltimore Banner reported, stretching already tight monthly budgets. The statewide unemployment rate hit 4.3% in February 2026, adding another layer of pressure.

These regional pressures mirror a broader national trend. Across the country, bankruptcy filings rose 11.9% to reach 591,850 cases during the 12-month period ending March 31, 2026, with the Mid-Atlantic regions mirroring this steady upward trajectory. For households facing severe wage garnishments or the threat of losing their homes, Chapter 13 offers a structured path to recovery. But, and this is the catch, that legal tool isn’t available if your accumulated financial obligations exceed the federal debt caps.

What Happens If You’re Over the Chapter 13 Debt Limit?

You May Not Qualify for Chapter 13

If your total noncontingent, liquidated debt exceeds either the secured or unsecured threshold, you generally can’t file for Chapter 13. The bankruptcy court will likely dismiss the case or require conversion to a different chapter. This means high-net-worth individuals or real estate investors with multiple properties often find themselves locked out of the standard repayment plan. Sound unfair? Maybe, but the restrictions apply even if you’ve got a high enough income to fund a monthly repayment schedule. Crossing the debt cap can force you into more complex (and expensive) legal alternatives to protect your assets.

Alternatives and Pending Legislation

People who exceed their limits frequently file for individual Chapter 11 bankruptcy to reorganize their finances. Chapter 11 doesn’t impose a maximum debt cap, but it’s generally more expensive, more time-consuming, and more procedurally demanding. Ask any bankruptcy attorney, and they’ll tell you: the filing fees alone are significantly higher, and the paperwork is on another level entirely.

Another strategy, informally called “Chapter 20,” involves filing for Chapter 7 first to discharge unsecured obligations and then following up with a Chapter 13. It’s a real option, though it requires careful timing and coordination. While the temporary, combined $2,750,000 debt limit expired back in mid-2024, understanding the current limits remains vital. Bipartisan lawmakers in 2026 have introduced new adjustment acts to address inflation and small-business caps, but until a new bill officially becomes law for consumer filings, debtors must strictly navigate the separate secured and unsecured thresholds. Don’t plan a filing strategy around pending legislation.

Why Debt Classification Can Change the Answer

Properly categorizing your financial obligations can mean the difference between qualifying for Chapter 13 and getting pushed into Chapter 11. Plenty of borderline cases turn on whether a specific liability should be classified as secured, unsecured, contingent, or unliquidated. Misclassifying a disputed claim or a co-signed obligation can artificially inflate your debt total and mistakenly knock you out of eligibility. Not where you expected the deciding factor to be, right?

This issue becomes especially critical if you’re dealing with second mortgages, business loan guarantees, or pending civil lawsuits. For instance, picture someone with a second mortgage on an underwater property; that balance might actually be reclassified as unsecured rather than secured, shifting the math entirely. A thorough review of every outstanding balance helps make sure that only the debts that legally count are included in your eligibility calculation.

People Also Ask

Does Maryland have its own Chapter 13 debt limits?

No. Maryland doesn’t set its own Chapter 13 debt limits. These thresholds come entirely from federal law under the United States Bankruptcy Code and apply the same way across all states and jurisdictions. A filer in Baltimore faces the same monetary restrictions as a filer in Portland or Miami. Local courts can’t alter or waive the federal maximums.

What are the current Chapter 13 debt limits for Maryland filers?

For cases filed between April 1, 2025, and March 31, 2028, the eligibility caps are $1,580,125 for noncontingent, liquidated secured debt and $526,700 for noncontingent, liquidated unsecured debt. If you exceed either of these limits, you’ll typically lose eligibility for Chapter 13. These figures apply nationwide, not just in Maryland.

Do contingent debts count toward the Chapter 13 limit?

They don’t. A contingent liability depends on a specific future event, such as a co-signed loan in which the primary borrower hasn’t defaulted. You still need to disclose these potential liabilities in your bankruptcy paperwork, but they aren’t included when calculating whether you’re under the cap.

What if my debt is slightly over the Chapter 13 limit?

Being slightly over the threshold calls for a careful review of how your debts are classified. Some obligations you’ve listed may actually qualify as contingent or unliquidated, which means they don’t count toward the final tally. Other debts may be legally categorized differently than they first appear on a standard credit report. If the final verified calculation still puts you above the federal cap, you generally can’t use Chapter 13, and an individual Chapter 11 bankruptcy becomes the primary reorganization alternative.

Can Chapter 13 stop wage garnishment or foreclosure?

Yes. Filing for Chapter 13 triggers an automatic stay that halts most collection actions. This court order generally requires creditors to stop wage garnishments, collection calls, and property seizures. Homeowners frequently use this chapter to prevent imminent foreclosure sales and protect their equity (which is often their single largest financial asset). The process lets you consolidate mortgage arrears into a manageable three- to five-year repayment plan, and once the court approves it, creditors must follow the reorganized payment schedule.

The Bottom Line for Maryland Filers

Meeting the 2026 Chapter 13 debt limits requires a clear understanding of federal bankruptcy rules and meticulous debt classification. With the secured cap set at $1,580,125 and the unsecured cap at $526,700 through March 2028, precision isn’t optional. These numbers are strict eligibility requirements, not abstract legal definitions you can argue your way around. Proper classification of each liability helps make sure you don’t unnecessarily lose access to protections that could save your home or stop a garnishment. As economic pressures persist across Maryland, using these legal tools correctly isn’t just a good strategy; it’s often the only path to financial stability.