What Is A Chapter 20 Bankruptcy?

What Is A Chapter 20 Bankruptcy?

     Even if you are not familiar with bankruptcy law lingo, you may have heard friends or a family member talk about the Chapter 20 bankruptcydifferent types of bankruptcy chapters. Or, you may have seen a news story about a company filing for Chapter 11 bankruptcy, which is the part of the Bankruptcy Code reserved for big business filings. But, for consumers, cases are either filed under Chapter 7 or Chapter 13. A Chapter 7 case is a liquidation of all of your debt and, when done properly will eliminate your unsecured obligations.

       An unsecured obligation is a debt that is not tied to a specific piece of property such as your house or your car. The most common form of unsecured debt is credit card debt, and many people seek the protection of bankruptcy in order to get out from under overwhelming credit card balances. On the other hand, Chapter 13 is a form of bankruptcy that requires repayment of at least a portion of your unsecured debt. A Chapter 13 is more like debt consolidation and is achieved by proposing a plan of repayment. Once approved, the debtor makes a plan payment to the Chapter 13 Trustee, and he or she distributes monthly payments to your creditors.

Break Down of Chapter 20 Bankruptcy

In some cases, though, you may find yourself seeking the benefits of both chapters of bankruptcy. This is referred to as a “chapter 20”and happens like this:

  • A person files for Chapter 7 relief and then a short time later finds themselves needing additional financial relief.
  • Because the law prohibits the refiling of a Chapter 7 within a certain time frame, and under certain circumstances, the same debtor can file a Chapter 13 to obtain additional relief.
  • The case is informally referred to as a Chapter 20, because the two chapter designations add up to the number 20.

     Should I do a Chapter 20 Bankruptcy?

If you have filed a Chapter 7 case before, but are still facing overly burdensome debt, you might consider seeking relief now under Chapter 13. For help with your needs in this regard, call us now at (916) 485-5444 to schedule your free attorney consultation. We can explain the process to you in detail, and help put you on the road to financial recovery today.


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