Chapter 7 Bankruptcy Discharge
There are certain eligibility requirements in reference to getting a discharge under the bankruptcy code. Let’s begin with the most common form of bankruptcy which is a chapter 7 fresh start. Chapter 7 is when someone, an individual typically, has very little in the way of personal assets but has a ton of debt. This person is seeking a fresh start under chapter 7 of the United States bankruptcy code. A person can receive a discharge under chapter 7 bankruptcy once every eight years. This basically means that once you file a chapter 7 bankruptcy, you are not eligible for that relief again for eight years.
Timing
Here’s where the math changes. If you are looking to do a chapter 7 bankruptcy and have never received a chapter 7 discharge, you still may not be eligible yet. If you have had a prior chapter 13 discharge within six years, then you are not eligible for a chapter 7 discharge. The code is basically saying this; if you have filed a prior chapter 7 then you have to wait eight years to do another chapter 7 in order to get a discharge. If you file a chapter 13 and received a discharge within six years, then you are not eligible for a chapter 7 discharge.
Chapter 13 Bankruptcy Discharge
The rules are even different for eligibility for chapter 13 discharge. You can receive a chapter 13 discharge provided you did not file a chapter 7 which resulted in a discharge within the last four years. You can also receive a chapter 13 discharge provided that you did not receive a prior chapter 13 discharge within the past two years. Now, you do have the ability to file a chapter 13 within those time periods, you simply will not be able to obtain a discharge. I have found in my practice that repetitive filers often don’t need a discharge. For example, if you have a home in foreclosure and you’re looking to pay off the mortgage arrearages over a three to five-year period, then you are not looking for a discharge. You are simply looking for a structured reorganization plan to repay your arrears. On the other hand, if you’re trying to pay a non-dischargeable debt such as parking tickets a percentage on the dollar, then you probably do want to receive a discharge. Otherwise you are simply going to owe the remaining balance that was not paid to the chapter 13 if you are not receiving a discharge.
As you can see, the rules are complex, the timing is critical, and you need a seasoned, professional bankruptcy attorney to assist you in order to navigate the bankruptcy code properly. For these reasons, I do not recommend that you try to file bankruptcy either chapter 7 or chapter 13 on your own. The laws have gotten too complex, they are too intricate and you truly need professional help.
