Chapter 13 Eligibility

Only individuals may file for Chapter 13 bankruptcy. Corporations and partnerships may not file for Chapter 13 bankruptcy. Any individual, even if self-employed or operating an unincorporated business, is eligible for Chapter 13 relief as long as that individual has regular income greater than reasonable living expenses, has unsecured debts not exceeding a certain sum, and has secured debts not exceeding a certain sum.

Creditor Claims

A "claim" is a right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured. A "claim" may also be the right to an equitable remedy for breach of performance if the breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured. A "debt" is a liability on a claim.

Time and Necessity of Filing Proofs of Claims

A "claim" in bankruptcy is (1) a right to payment, whether or not reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (2) a right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured.

Bankruptcy During Divorce

Problems may result from the conflict of interests between domestic relations courts and bankruptcy courts when a couple files for bankruptcy during a divorce. The conflict arises because of the differing policies between the courts. Bankruptcy courts have a policy of providing a fresh start and distributing the debtors' assets equally among all of their creditors. Family courts have a policy of equitably dividing the property between the spouses.

Dischargeability of Taxes in Bankruptcy

Debtors may be able to discharge some or all of their older income tax obligations in bankruptcy. Dischargeability of these taxes turns on the question whether or not they are "priority" claims. Tax obligations that are non-priority are dischargeable.