Chapter 20 Bankruptcy, is it real?
Date: Thu, 04/25/2013 - 04:34
There is no such thing as a
There is no such thing as a “Chapter 20”. The term is simply used to describe filing a Chapter 13 on the heals of a Chapter 7 (7+13=20). And, yes, the back half of a “Chapter 20” will not result in the entry of a Chapter 13 Discharge.
If you park yourself in the Chapter 13 until the 4 years runs and convert you WILL NOT get a discharge because you look at the date of filing NOT the date of converting. If you park yourself in a Chapter 13 until the 4 years runs and then have the 13 dismissed you could file a NEW case as a Chapter 7(assuming you qualify). However, there may be an issue of whether or not you filed the Chapter 7 in “good faith”. I do not recommend gaming the system in this fashion.
Des.
This is what happens when I'm
This is what happens when I'm too tired as I made huge mistake so I must correct this. The four years is between the 7 and 13 (to obtain a 13 dishcarge), not a 7 and 7. To ever qualify for the 7 discharge a full EIGHT (8) years must pass. Sorry my above post does not correctly state that. In your situation you filed in 2011. You would not be able to get a 7 discharge until some time in 2019. Depending upon when your 7 discharge was entered you would be able to file a 13 sometime in 2015 and, if you complete the plan, obtain a discharge.
The only way to get the four years to pass is to hang out in the 13 then dismiss it and file a new case. There would not be a conversion to Chapter 7. Again, "good faith" may play a role in such a course of action.
Sorry for the inaccurate post above.
Des.
Chapter 20
We filed Chapter 7 bankruptcy three years ago. We had our mortgage modified as a result but we assumed that the second mortgage would be discharged, but our lawyer is telling us that we have to file a chapter 13 after four years to get rid of lien of second mortgage. Why was this not included in the chapter 7. Seems like the lawyers are trying to make money twice. and are there other options
Unless you live in the 11th
Unless you live in the 11th circuit there is no such thing as a valid lien strip in the context of a Chapter 7. While the lender's ability to ask for $$ was discharged, its ability to enforce the lien was not.
You will be doing the Chapter 13 for the purpose of a lien strip assuming there is no equity in the property after considering the first mortgage. Your attny is telling you to wait 4 years as doing so will allow you to obtain a Chapter 13 discharge. Some jurisdictions will not allow the lien strip in a "Chapter 20" because the judges have determined that a lien strip only happens upon entry of a 13 discharge. If you file the 13 before the 4 year mark you will not be entitled to a 13 discharge.
Be careful. . . home values are increasing. If, by the time you do file the 13, there is any equity in the property after considering the first, you will not be successful at the lien strip.
One last comment. . . have you explored negotiating a settlement with the lender to buy the lien release? Many folks state they have been able to pay a relatively small amount to the lender to get the lien release. Food for thought.
Des.