By law an individual who receives a discharge in a Chapter 7 Bankruptcy
must wait 8 years before filing another Chapter 7 Bankruptcy that will lead to a discharge.
Financial problems however do not always wait until an individual meets the requirements of the Bankruptcy Code, and sometimes an individual accumulates new debts too quickly to wait for 8 years. One option that offers some relief in this situation is a Chapter 13 Bankruptcy.
A Chapter 13 of course requires the Debtor to make monthly payments to pay off part of the debt, and thus this alternative may not be feasible for individuals in deep financial distress. It is also true that the Debtor must wait 4 years to file the Chapter 13, if he or she is going to receive a discharge.
This is an important distinction. A Debtor in fact may file a Chapter 13 Bankruptcy right after the Chapter 7 is discharged, but in this case he will not receive another discharge. There are some limited circumstances, where it makes sense to file the bankruptcy without receiving a discharge, such as to stop a mortgage foreclosure. However, in most cases the individual seeking bankruptcy relief has other debts which need a discharge, and in this case she will need to wait 4 years after the Chapter 7 before filing a Chapter 13.
No comments:
Post a Comment