Many debtors who receive a Chapter 7 discharge, subsequently file Chapter 13 bankruptcy. For these debtors, obtaining a Chapter 13 discharge often is not the priority.
Reasons to File Chapter 13 after Receiving a Chapter 7 Discharge
Manage Debts Not Discharged in the Chapter 7 Case - One reason a debtor may choose to file a Chapter 13 case after receipt of a Chapter 7 discharge is because certain debts are not dischargeable in a Chapter 7 case. Such debts include:
- Domestic support obligations;
- Certain taxes;
- Student loans;
- Court ordered fines and restitution; and
- Debts arising in relation to DUI/DWI.
Once the Chapter 7 case is closed and the debtor receives a discharge, creditors whose debts are non-dischargeable may immediately resume collection efforts against the debtor. By filing a Chapter 13 case, a debtor is afforded the protection of the automatic stay which prevents creditors from pursuing collection efforts against him. Moreover, filing Chapter bankruptcy allows the debtor to restructure those debts not discharged in the Chapter 7 case and repay them over time.
Manage Arrearages on Debts Reaffirmed in the Chapter 7 Case - Another reason a debtor may choose to file a Chapter 13 case after receiving a Chapter 7 discharge is to manage delinquencies on debts which he reaffirmed in the Chapter 7 case or to manage delinquencies on debts which he continued to voluntarily pay during the Chapter 7 case. If, subsequent to a Chapter 7 discharge, a debtor falls behind on a reaffirmed debt or on a debt which he chose to voluntarily pay, filing a Chapter 13 case will allow him to propose a plan to repay those arrearages in full and will stop a foreclosure or repossession.
Entitlement to a Chapter 13 Discharge
A debtor who files a Chapter 13 bankruptcy case subsequent to receiving a Chapter 7 discharge may be ineligible to receive a Chapter 13 discharge. The Bankruptcy Code requires a debtor who has received a Chapter 7 discharge to wait six years before he will be eligible to receive a Chapter 13 discharge. However, this fact does not prevent a debtor who has received a Chapter 7 discharge from filing a Chapter 13 case before expiration of that six year waiting period.
Getting Legal Help
If you received a Chapter 7 discharge and are considering filing a Chapter 13 case, you should speak with a knowledgeable bankruptcy attorney. A bankruptcy attorney will evaluate your financial situation to determine whether you are eligible to file Chapter 13 and will advise you of the legal ramifications of filing Chapter 13 after receiving a Chapter 7 discharge.
