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Chapter 7
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Chapter 13
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Also Known As |
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Liquidation.
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Adjustment of
Debts of an Individual With Regular Income.
Wage Earner
Plan.
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Purpose |
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Cancel your
debts.
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Catch up on
mortgages or car loans by making payments through
a Plan lasting from 3 to 5
years.
If you do not
qualify for Chapter 7 because of the Means
Test, to pay only a portion of your debt,
through a plan lasting from 3 to 5 years, and
cancel the balance
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Debt Limits |
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None.
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$1,010,650 in secured debt.
$336,900 in unsecured debt.
Individuals
with higher debt may consider filing a Chapter
11 Bankruptcy.
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Property
You Can Keep |
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The kinds and amounts of property
allowed by the federal or state exemption
laws.
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All your property, as long as you
make all the payments required under your Chapter 13 Plan.
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How
Long Does It Take |
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About 3 to 6 months.
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3 to 5 years.
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Co-Debtors |
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Creditors can go after people who
co-signed loans for you.
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Creditors cannot go after people
who co-signed loans for you, as long as you make
all the payments required under your Chapter 13 Plan.
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Effect
on Child Support, Alimony and Property Division |
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None.
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No effect on
child support.
No effect on
alimony that is truly meant to support an
ex-spouse.
Does allow
adjustment or cancellation of debts that arise
from a property division, including alimony that
is actually property division.
(See Bankruptcy
and Divorce page.)
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Debts
That You Cannot Discharge |
 |
Credit obtained by fraud or false
pretenses. |
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Recent cash advances. |
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Recent purchases of luxury goods. |
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Those debts not listed in your schedules. |
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Alimony and child support. |
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Student loans (unless
hardship). |
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Personal injury or death caused by
driving while intoxicated. |
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Taxes you withheld from your
employees. |
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Sales taxes you collected in your
business. |
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Income taxes if any of the
following are true:
 |
You filed the return during the 2
years before you filed bankruptcy. |
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Your return was due during the 3
years before you filed bankruptcy. |
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Your tax liability was assessed
during the 240 (about 8 months) before you
filed bankruptcy. |
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You never filed a return. |
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You filed a late return during
the 2 years before you filed bankruptcy. |
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You filed a fraudulent return. |
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Property taxes required to be paid
during the year before filing bankruptcy. |
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Restitution or fines required by a
criminal sentence. |
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Fiduciary fraud. |
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Embezzlement and larceny. |
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Willful and malicious injury to
persons or property. |
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Income tax interest and penalties
which became due after you filed bankruptcy. |
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Divorce property settlements or
decrees. |
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Those debts that were or could have
been listed in a prior case in which were
denied or waived a discharge. |
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A loan used to pay a tax that you
could not discharge. |
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Credit obtained by fraud or false
pretenses. |
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Recent cash advances. |
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Recent purchases of luxury goods. |
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Those debts not listed in your schedules. |
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Alimony and child support. |
|
Student loans (unless
hardship). |
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Personal injury or death caused by
driving while intoxicated. |
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Taxes you withheld from your
employees. |
|
Sales taxes you collected in your
business. |
|
Income taxes if any of the
following are true:
|
You filed the return during the 2
years before you filed bankruptcy. |
|
Your return was due during the 3
years before you filed bankruptcy. |
|
Your tax liability was assessed
during the 240 (about 8 months) before you
filed bankruptcy. |
|
You never filed a return. |
|
You filed a late return during
the 2 years before you filed bankruptcy. |
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You filed a fraudulent return. |
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Property taxes required to be paid
during the year before filing bankruptcy. |
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Restitution or fines required by a
criminal sentence. |
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*Fiduciary fraud. |
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*Embezzlement or larceny. |
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*Willful and malicious injury to
persons. |
(See the Chapter 13 Super Discharge,
below).
* Debts due to
fiduciary fraud, embezzlement, larceny and willful
or malicious injury are discharged unless the
creditor requests a hearing and proves that the
act occurred. |
