Chapter
7 | Chapter
13 | Do
I have a Choice? | Discharging
Tax Debts | FAQs
Chapter 7 Bankruptcy
- The most common type of bankruptcy
- Debtor generally
loses all his assets (except "exempt" assets)
- Debtor
generally wipes out (discharges) all his debts
(except certain "non-dischargeable" debts
)
- Still available if debtor's debts are not "primarily" consumer....
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Chapter 13 Bankruptcy
- Increasing in popularity
- Debtors generally keep
their assets
- Debtors generally pay their debts according
to a "plan"
- Debtors commit their income,
in excess of necessary living expenses, to repay
all or a portion of their debts
- Plan life is 3-5
years depending on debtor's income
- At end of plan life, unpaid debts are discharged
- Useful
for mortgage foreclosure
- Still discharges tax debts
that would have been discharged in a 7
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Chapter 7 vs. 13: Do I Have a Choice?
Do I have a choice between chapters 13 and 7 bankruptcy?
Usually no. Under the "new bankruptcy law" (called the "Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005," but referred to as BAPCPA),
most debtors are forced to go through chapter 13 (a repayment arrangement) rather
than the faster chapter 7 process.
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How soon can I get a mortgage after filing for bankruptcy?
5 years after BK Discharge for a conventional mortgage
at conventional rates
3 years after BK Discharge for an FHA mortgage at decent
rates
1 year after BK 13 Plan payments begin (subject to certain
conditions).
Tax Bankruptcy
If you facing tax problems as well
as other financial problems leading you to think about
filing bankruptcy, perhaps you should consider a
Tax Bankruptcy.
> Discharging
Tax Debts
