26 Mar Do I Really Need A Discharge?
Recently, two different clients came in to see me about filing bankruptcy with similar problems: they had filed a bankruptcy within the last couple of years and therefore aren’t eligible to get a discharge in a new case filed now.
One of the things that BAPCPA, the law that went into effect in October 2005, did was to put up barriers for multiple bankruptcy filings. It used to be that you could file a second bankruptcy within a year if the first one had been dismissed, but now you can’t do that without losing the automatic stay in thirty days (or convincing the court not to end the stay).
You also used to be able to file a chapter 7 and then a chapter 13, with no time in between and have your debts discharged in both cases. You can’t do that anymore and have to wait four years from when you filed the chapter 7 if you want/need a discharge in the chapter 13.
Well, the first of the two clients filed a chapter 7 bankruptcy and received a discharge a little under three years ago. Now she is behind in house payments, the mortgage company is threatening foreclosure, and she needs the protection of a chapter 13 bankruptcy to get caught up.
I filed a chapter 13 for her with reasonable payments, and a plan to catch up the arrearage and stop the foreclosure. She won’t get a discharge of any unsecured debts but she will save her home.
The second client filed a chapter 7 bankruptcy about 5 years ago, and needs to file another one now. But the law says you must wait 8 years in order to get a discharge. Here, too, the answer is to file a chapter 13 bankruptcy with minimum payments. Three years from now she gets a discharge of anything not paid.
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