“Chapter 20” is a term used to refer to when an individual files back-to-back Chapter 7 and Chapter 13 cases. It technically does not exist as there is no Chapter 20 in the Bankruptcy Code. However, a debtor who cannot resolve his/her financial problems by filing only a Chapter 7 or Chapter 13 bankruptcy may be able to obtain debt relief by filing them in a row.
Typically, the debtor files a Chapter 7 case and immediately after receiving the discharge order, the debtor files a Chapter 13 case. It is important to understand that in this situation, the debtor is NOT eligible to receive a discharge in the Chapter 13 case. Bankruptcy law requires you to wait at least four years before you can qualify to receive a discharge of debt in the subsequent Chapter 13.
Why would you pursue “Chapter 20” relief? It allows you more time and protection from creditors if you have too much debt. By filing a Chapter 7 initially, you can eliminate a significant portion of your total debt. This can help you fall below the debt limits for your Chapter 13 case. The subsequent Chapter 13 can also allow you to cure past due payments on your secured loans, including mortgages and car loans. If you have taxes or other debts that were not dischargeable in the Chapter 7, you can use your Chapter 13 plan to pay these debts. Lastly, you may also be able to remove inferior liens in a process called “lien stripping” in you Chapter 13.
If you are interested in learning more about filing a “Chapter 20,” contact us to schedule a consultation. This type of bankruptcy requires a well-planned strategy and we can help.
The “defender of the little guy,” DeLadurantey Law Office, LLC. handles student loan debt and bankruptcy matters (Chapter 7 and Chapter 13) in Milwaukee, South Milwaukee, West Milwaukee, and Milwaukee County, including the municipalities of Bayside, Brown Deer, Cudahy, Fox Point, Franklin, Glendale, Greendale, Greenfield, Hales Corners, Oak Creek, River Hills, Shorewood, St. Francis, Wauwatosa, West Allis, and Whitefish Bay. The firm also can handle your debt negotiations, debt relief, and mortgage loan modifications. Contact DeLadurantey Law Office, LLC by phone: (414) 377-0518. Like us on Facebook.