Bankruptcy Flashcards
(18 cards)
What are the three types of bankruptcy processing available?
Chapter 7, Chapter 13, Chapter 11
Each type serves different needs based on individual circumstances.
What is Chapter 7 bankruptcy?
A liquidation type of bankruptcy procedure
It eliminates a consumer’s debt by having a trustee sell some of the debtor’s personal property.
How long does it take for most debts to be discharged after filing for Chapter 7?
115 days
Certain obligations must still be repaid even after discharge.
What obligations must still be repaid after Chapter 7 bankruptcy?
- Child support
- Alimony
- Income taxes less than three years past due
- Student loans
- Secured debt
These debts are typically not dischargeable in bankruptcy.
What is Chapter 13 bankruptcy also known as?
The wage-earner plan
It allows debtors to keep their personal assets while repaying their debts.
What must a debtor do under Chapter 13 bankruptcy?
Pay more monthly to make payments on overdue debt along with current payments
This plan is structured to help manage debt repayment over time.
What are the unsecured debt limits for filing Chapter 13 bankruptcy in 2025?
$465,275
This includes debts like credit card bills or personal loans.
What are the secured debt limits for filing Chapter 13 bankruptcy in 2025?
$1,395,875
This includes debts such as mortgages and car loans.
Who is Chapter 11 bankruptcy intended for?
Businesses and individuals who exceed Chapter 13 debt limitations or lack regular income
It focuses on reorganization and repayment strategies.
What happens to unsecured debt under Chapter 7 bankruptcy?
Eliminated
This allows individuals to start fresh without certain debts.
What happens to secured debt under Chapter 7 bankruptcy?
Nonexempt assets are sold to pay off secured debt
This ensures creditors are compensated from the debtor’s assets.
How long does Chapter 13 bankruptcy typically stay on credit reports?
7 years
This duration affects future credit opportunities.
Can Chapter 7 bankruptcy stop a foreclosure?
No (but it may delay it)
Immediate relief from foreclosure is not guaranteed.
What is the typical duration for Chapter 13 bankruptcy to complete?
3-5 years
This is the time frame for debt repayment under this plan.
How long does Chapter 11 bankruptcy typically stay on credit reports?
10 years
This long duration can significantly impact credit ratings.
What is the primary purpose of Chapter 7 bankruptcy?
Liquidation
It aims to eliminate debts by selling off assets.
What is the primary purpose of Chapter 13 bankruptcy?
Repayment
It focuses on allowing individuals to repay their debts over time.
What is the primary purpose of Chapter 11 bankruptcy?
Reorganization
It allows businesses to restructure their debts while continuing operations.
