What Is Chapter 20 Of The Bankruptcy Code?
Robert J. Adams & Associates

What Is Chapter 20 Of The Bankruptcy Code?


First of all there is no Chapter 20 in the Bankruptcy Code. The term “Chapter 20” is a short hand term where the individual or married couple have filed a Chapter 7 and shortly thereafter filed a Chapter 13.

When the homeowner is faced with a foreclosure and has no present ability to file a Chapter 13 to save the property a Chapter 7 may be appropriate. In addition to mortgage defaults there is likely a good deal of other debts. The discharge in a Chapter 7 relieves the person from his/her/their debt obligations.

But circumstances change. For instance a married couple may have separated and both incomes were required to successful file a Chapter 13. Being separated a Chapter 7 was the logical avenue so they could get a “fresh start.”

After the Chapter 7 discharge the couple reconciles and now has sufficient income to pay the current mortgage; make payments to the Chapter 13 trustee and have a sufficient amount for their everyday living expenses.

Courts, trustees, and mortgagee may look at such a “Chapter 20” with suspicion. But if circumstances have changed for the good the Chapter 13 should be confirmed and the debtor will be given a chance to save the home.

There are, of course, other changes in circumstances following a Chapter 7 discharge. An unemployed or under employed Chapter 7 debtor may get a good paying job. The list of positive changes of circumstances following a Chapter 7 could on and on.

Good things sometimes happen to good people.

The point is that something good happened after the Chapter 7 discharge. And the subsequent Chapter 13 case is being filed in “good faith.”

For more information on Chapter 20 Of Bankruptcy Code, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (312) 724-5650 today.

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