A person may file what is known as a “Chapter 13” bankruptcy to obtain bankruptcy relief. A person filing a Chapter 13 bankruptcy may receive a discharge (cancellation) of his/her then-existing dischargeable debts if the Chapter 13 case is filed with the Bankruptcy Court over 4 years from the date of the filing of the prior Chapter 7 case. Since a person who has received a Chapter 7 discharge is not able to receive another Chapter 7 discharge for a period of 8 years from the date of the filing with the Bankruptcy Court of the original Chapter 7 case, a Chapter 13 bankruptcy is particularly helpful to those persons who need bankruptcy relief to stop a foreclosure/sale, harassing creditors, lawsuits and garnishments. Additionally, a Chapter 13 case filed over 4 years after the Chapter 7 case is filed can be used to protect a person’s property that is being threatened to be taken by a creditor (such as a paid-off vehicle). The Chapter 13 case would not only allow for a discharge of his/her then-existing dischargeable debts, but would allow up to five years to get caught up on mortgage payments or allow an attempt to modify a mortgage to save the property. Chapter 13 can be used to allow up to 5 years to get caught up on payments for other secured debt (such as a vehicle), or potentially, in certain situations, modify/restructure debt secured by other property (such as a vehicle) to reduce the amount owed or interest rate on that secured property.
Even if the Chapter 13 case is filed within 4 years of the date of the filing of the original Chapter 7 case and a discharge of debts can’t be achieved, the new Chapter 13 case can still serve to stop a foreclosure/sale and allow up to five years to get caught up on mortgage payments or allow an attempt to modify the mortgage. It could also be used to get caught up on payments regarding other secured debt (such as a vehicle debt) over a period of up to 5 years.
For more information on how a Chapter 13 case filed after a prior Chapter 7 case filing may benefit your particular financial situation or to schedule a free initial consultation to discuss how I may be able to help you, call Randall C. Hiepe, Esquire at (727) 898-2700 (Pinellas County) or at (863) 802-4700 (Polk County).