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- Not every debt can be included in a personal bankruptcy case, warns the book "How to File for Chapter 7 Bankruptcy." Court fines, tax bills less than three years old, alimony, child support and most federally-backed student loans are ineligible for bankruptcy assistance.
(Reference 1) - Chapter 7 enables people who earn less than their state's annual median income level to permanently discharge their obligations to pay debts like credit card and medical bills.
- People with regular income and problems such as late mortgage payments can select a partial debt repayment plan under Chapter 13, notes the United States Bankruptcy Court.
- Business owners may be best served by restructuring their personal and professional debts under Chapter 11, according to the United States Bankruptcy Court. This option allows partial debt repayment, as well as retention of personal and business assets.
(Reference 3)
Misconceptions
Chapter 7 Function
Chapter 13 Function
Business Owners
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