Chapter 7 and Chapter 13 are the two most common forms of bankruptcy filed by individuals who need a fresh financial start. If you are considering bankruptcy, it is important you understand there are instances when filing Chapter 7 or Chapter 13 may not bring about the level of debt relief you anticipated. In cases such as this, filing for Chapter 13 immediately after receiving a discharge in a Chapter 7 bankruptcy could give you a higher level of debt relief. This type of filing is generally referred to as a "Chapter 20" bankruptcy.
Filing for Chapter 13 immediately after a Chapter 7 discharge may seem counterproductive. Unless you go through the 4-year waiting period you will not be able to get your remaining, qualifying debts discharged through Chapter 13. So, why bother filing? Chapter 20 is extremely beneficial if you have an excessive amount of debt and need additional time to get that debt paid down. Reducing or eliminating unsecured debt in a Chapter 7 can also free up income so you will be able to pay down a mortgage, overdue vehicle payments or other non-dischargeable debt. Chapter 20 can be used to strip an unsecured second mortgage, which could be a significant financial advantage. Lien stripping is not available through Chapter 7, but there are some situations when filing a Chapter 13 immediately after Chapter 7 could prove key to helping you avoid foreclosure and the loss of your home. Not all bankruptcy courts operate in the exact same manner and it is advised you seek legal counsel from a highly experienced bankruptcy lawyer prior to filing any type of bankruptcy.
The lawyers here at The Fuller Law Firm, PC are well-versed on bankruptcy laws and are more than qualified to help you determine whether Chapter 20 may be right for you. We understand how frustrating financial problems can be, particularly when you have fallen behind and creditors are aggressively pursuing payment. We are here to help. Our firm offers a free, one-hour bankruptcy consultation. During this consultation you will be given the opportunity to discuss your current financial situation with an experienced lawyer and learn about the legal options available to you. With our assistance you stand a much greater chance of being able to alleviate your financial worries and attain true debt relief. Call an Oakland bankruptcy lawyer at our firm today to find out more.