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 underemployed 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.”
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