One of the benefits of filing a Chapter 13 Bankruptcy Case is that there is a broader discharge of debts available in a Chapter 13 Case versus a Chapter 7 Case. Many debts that are non-dischargeable in a Chapter 7 Case are dischargeable in a Chapter 13.  Perhaps you have had a prior bankruptcy in which you received a discharge.  If so, you may be wondering whether you will be eligible to receive a Chapter 13 Discharge. And assuming that you are ineligible for a Chapter 13 Discharge, you may be wondering whether Chapter 13 can still benefit you.

Generally, every individual who qualifies for Chapter 13 is eligible to receive a Chapter 13 Discharge of all of their dischargeable debts. The following important exceptions apply:

  1. You are not eligible to receive a Chapter 13 Discharge if you received a prior Chapter 7 Discharge in a case filed within 4 years of the date you file your new case;
  2. You are not eligible to receive a Chapter 13 Discharge if you received a prior Chapter 13 Discharge in a case filed within 2 Years of the date you file your new case.

Consequently, the timing of successive bankruptcy cases can be important for determining whether you will be eligible for a Chapter 13 Discharge in your new case.

It important to note that even if you are not eligible to receive a Chapter 13 Discharge in a new case, you may still be eligible to file a Chapter 13 Case, and receive many of the benefits of Chapter 13, such as the automatic stay of collection action by your creditors against you or your property.

For instance, assume that you received a Chapter 7 Discharge on April 31, 2012 in a case filed on January 1, 2012. Assume that on July 1, 2012, after your Chapter 7 Case is closed, your mortgage lender begins a foreclosure proceeding because you did not pay your May and June 2012 mortgage payments. You may still be able to file a Chapter 13 Case to stop your mortgage lender from foreclosing on your property, and use your Chapter 13 Plan to get caught up on your mortgage arrears. In this situation, you are not eligible for a Chapter 13 Discharge, but clearly, Chapter 13 is beneficial to you.

Contact Over the Mountain Law Center, LLC today to set up a free consultation with one of our Alabama Consumer Bankruptcy Lawyers at 205-870-8480. Our Bankruptcy Attorneys, serving the Birmingham, Alabama and surrounding areas will consider the specifics of your case and provide you with sound legal advice. The law is complicated, so don’t leave anything to chance. Call us today!