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Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy, continued

Bankruptcy situation 5: How would my Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy work if I have valuable real estate property that would not be exempt from the bankruptcy estate?

Chapter 7 Bankruptcy:

If you have valuable real estate property and you file for a Chapter 7 Bankruptcy, you may lose the real estate property unless you can either arrange to swap the real estate property with exempt property of a similar value or pay the bankruptcy trustee the fair market value of the non exempt real estate property.

Chapter 13 Bankruptcy:

If you file a Chapter 13 Bankruptcy, you will not lose the real estate property provided that you comply with your repayment plan according to the Chapter 13 Bankruptcy.

Bankruptcy situation 6: How would my Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy work if I owe back taxes to the IRS?

Chapter 7 Bankruptcy:

If you owe back taxes to the IRS, the IRS will most likely not let you file a Chapter 7 Bankruptcy. So, if you are in this situation, you cannot file a Chapter 7 Bankruptcy.

Chapter 13 Bankruptcy:

Similarly, the dischargeability is limited in the Chapter 13 Bankruptcy case too.

Bankruptcy situation 7: How would my Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy work if my debts are from illegal activities?

If you owe debts resulting from activities such as the ones listed below, then the debts are usually not discharged.

• larceny
• breach of trust
• embezzlement
• fraud
• willful and malicious injury to another or property

Chapter 7 Bankruptcy:

These debts are not discharged under a chapter 7 bankruptcy.

Chapter 13 Bankruptcy:

These debts are not discharged under a Chapter 13 bankruptcy either.

Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy, continued

Bankruptcy situation 3: What happens to my specific debts under a Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy?

Some types of debts such as the debts shown below may not be discharged. Examples of such debts are:

• student loans (there are exceptions such as if repayment would cause hardship)
• court ordered fines or penalties
• child support or alimony
• taxes that are less than 3 years past due and filed less than 2 years ago or were assessed less than 240 days before filing.

Chapter 7 Bankruptcy:

With a Chapter 7 Bankruptcy, these debts are usually not discharged.

Chapter 13 Bankruptcy:

These debts must be paid in full by the end of the Chapter 13 Bankruptcy repayment plan. If these debts are not paid in full, you can still pay the balance at the end of your Chapter 13 Bankruptcy.

Bankruptcy situation 4: How would my Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy work if I have enough disposable income / money for a Chapter 13 Bankruptcy but I want to file a Chapter 7 Bankruptcy?

Some people prefer to file a Chapter 7 Bankruptcy to a Chapter 13 Bankruptcy. However, if you have enough disposable income to file and go through a Chapter 13 Bankruptcy, then the bankruptcy court may not let you file a chapter 7. The bankruptcy court could dismiss or cancel your bankruptcy case. In another word, you are too rich or have too much money for a Chapter 7 Bankruptcy.

Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy

Below is a comparison of Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy. When filing for bankruptcy, most people choose between a chapter 13 or 7 bankruptcy. Chapter 7 and Chapter 13 Bankruptcy are designed for different purposes. This section of Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy provides a comparison of Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. There are many sources for information on chapter 7 and 13 bankruptcy.

When deciding between a Chapter 7 Bankruptcy and a Chapter 13 Bankruptcy, use the following Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy chart to help you make informed decisions.

Bankruptcy situation 1: How would my Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy work if I am very behind on your mortgage payments?

Chapter 7 Bankruptcy:

With a Chapter 7 Bankruptcy, you will probably have to give your real estate property back to the bank whom you owed the mortgage payments. Sometimes, you can negotiate with the bank to pay the value of the nonexempt equity to the bankruptcy trustee from any income you have since the filing of Chapter 7 Bankruptcy.

Chapter 13 Bankruptcy:

With a Chapter 13 Bankruptcy, you can repay what you owe over 3 to 5 years and keep the current mortgage payments on time. If you file a chapter 13 bankruptcy, you will keep your home.

Bankruptcy situation 2: How would my chapter 7 bankruptcy vs chapter 13 bankruptcy work if I filed for bankruptcy previously and received a discharge within the past 8 years?

Chapter 7 bankruptcy:

If you previously file a chapter 7 bankruptcy within the past 8 years, you cannot re-file a chapter 7 bankruptcy. However, if your previous bankruptcy was a chapter 13 bankruptcy, then you can file another bankruptcy IF you paid at least 70% of your debts off during the repayment period.

Chapter 13 bankruptcy:

If your previously filed a chapter 13 bankruptcy, you can re-file another bankruptcy. Under the new bankruptcy law, you have to wait at least 5 years between each bankruptcy filing.