Filing Chapter 13 After Chapter 7 Bankruptcy
It is true that if you filed a Chapter 7 Bankruptcy and got a discharge of debts, you cannot file another Chapter 7 for 8 years. That does not mean that there isn’t any help for you available under the bankruptcy code.
How Chapter 13 After Chapter 7 Bankruptcy Works
Even if you filed a Chapter 7 Bankruptcy and got a discharge, you still have the right to do a Chapter 13 bankruptcy reorganization if you can support the plan payments. There is no length of time that you have to wait to file a Chapter 13 after Chapter 7 bankruptcy. You can file a Chapter 13 bankruptcy reorganization case the day after a Chapter 7 is discharged.
Filing a Chapter 13 after Chapter 7 bankruptcy is often referred to as doing a “Chapter 20” even though there is no “Chapter 20” in the bankruptcy code. You may want to do this to control and pay priority taxes, cure mortgage arrears or pay cars off. It is a tool to control and debts that have survived a Chapter 7 discharge.
Using Chapter 13 After Chapter 7 Bankruptcy to Strip Mortgage Liens
Filing Chapter 13 after Chapter 7 bankruptcy gives you the ability to remove, or strip, a junior mortgage lien, usually a 2nd mortgage, off of your home. This can only be done if the senior mortgage debt is more than the value of the home. Where there has been a prior Chapter 7 bankruptcy, personal liability for the debt has already been discharged. All that is left is the lien on the home. Now using Chapter 13 after Chapter 7 bankruptcy can remove that lien.
No Discharge of Debt in a Chapter 13 After Chapter 7 Bankruptcy
What you don’t get in a Chapter 13 after a Chapter 7 is a discharge order wiping out general unsecured debts. If enough time has not passed between the Chapter 7 filing and the Chapter 13 filing, you cannot discharge any debt (as opposed to removing the junior mortgage lien.) However, that is not important if there are no debts to wipe out since they already were in the prior Chapter 7 bankruptcy.
Sometimes the Only Option is Chapter 13 After Chapter 7 Bankruptcy
Sometimes things happen where you end up with new debts that you cannot pay after getting a Chapter 7 bankruptcy discharge. You can still use Chapter 13 bankruptcy plan to control, reorganize and pay them. The protection of the Chapter 13 bankruptcy law protects you from creditors doing anything to take assets or collect money from you.
A Chapter 13 plan can go up to 5 years. However, you cannot file a Chapter 13 bankruptcy plan that proposes to pay less than 100% to the unsecured creditors unless you wait at least 4 years from the filing date of your Chapter 7 bankruptcy case.
When a Chapter 13 After Chapter 7 Bankruptcy Can Dischage General Unsecured Debts
If at least 4 years have passed from the filing date of your Chapter 7 bankruptcy, you can file a Chapter 13 bankruptcy and propose a plan that may pay nothing to your unsecured creditors. Then you can get a discharge wiping out the unsecured debts when your plan is completed just like you would have in a Chapter 7 case.
Call 916.485.5444 now for a free attorney consultation. Get more information on filing Chapter 13 after Chapter 7 bankruptcy.