“Chapter 20″ Bankruptcy

Bankruptcy cases in the United States come in many stripes, each intended for different circumstances. Among other possibilities, there are Chapter 7, Chapter 12, and Chapter 13. But there is another type of bankruptcy you may hear of: Chapter 20. If you skim the Bankruptcy Code, you may notice that there is no chapter 20. This is because “Chapter 20″ is actually just a clever way of referring to a combination of a Chapter 7 case followed by Chapter 13.

The rationale behind filing for bankruptcy twice lays in the differences between the various bankruptcy codes. Filing for Chapter 7 bankruptcy allows you to eliminate unsecured debts, but Chapter 13 allows you to more easily combine debts and successfully manage mortgages and similar debts. For people who need the features of both Chapter 7 and Chapter 13, filing the two in succession can be much more effective than just filing one.

“Chapter 20″ and Federal Law

Unfortunately for them, however, the Court noticed this loophole and acted to stop it. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 brought a number of changes to the Bankruptcy Code, including time restrictions on successive bankruptcy filings. With that law in place, you must wait three years between filing for Chapter 7 and filing for Chapter 13.

Qualifying for Chapter 13 bankruptcy means meeting certain financial requirements, but these requirements were substantially stricter before 2005. In addition, depending on the circumstances, there are people who may still be able to benefit from filing twice, even though the cases are three years apart.

Contac t Us

Bankruptcy law is complicated. That’s why the experienced Boston bankruptcy lawyers of Joshua Spirn & Associates can evaluate your case and help you make the right decision. To discuss your case with the experienced Boston bankruptcy lawyers, contact us today at 800-975-5346.