here's a better explanation of chapter 7 vs chapter 13
yes, you can file chapter 7 whether your debt is $200,000 or $2,000,000 and there is no pay-back requirement
the cutoff for chapter 13 is owing $307,675 or less. you live on a budget decided by the court and you pay your creditors for 3-5 years and they eat whatever you don't pay in that time period. the BK is discharged after you complete your assigned payments, and there is a forgiveness option for remaining balances if payments were made as ordered
but when your debt is $307,675 or less the court can, after examining your circumstances, deny your chapter 7 petition, place you in the chapter 13 category instead, and put you on a court-determined budget and order you to pay your creditors. you then have the option to not file at all if you disagree w/ the court's opinion of your circumstances. no one forces you to file but your options in filing can be limited by what the court decides
that's why JB's $500,000 matters, because his amount keeps her out of consideration for chapter 13 vs chapter 7
if the IRS and court debts are not eligible for discharge, her total debt is even lower than she claims and an even better case could be made for requiring chapter 13 instead of chapter 7
she alleges $793,341 - $500,000 = $293,341
then, $293,342 - $68,000 (IRS) = $225,341
in addition to hiding assets/income, she wants her debt to appear greater than $307,675 so that the court can't consider her for a pay-back BK