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What is a “Chapter 20” Bankruptcy?

There are occasionally times when individuals have financial problems that cannot be entirely solved by filing a Chapter 7 or Chapter 13 bankruptcy.  In these unique situations, it may be best to file a Chapter 7 bankruptcy and then immediately file a Chapter 13 bankruptcy, informally known as a “Chapter 20.”

Why would you do this?  Sometimes debtors have an excessive debt load that precludes them from filing a Chapter 13 case, but at the same time they are delinquent on a house or car loan.  In Chapter 7 cases, the creditors do not have to allow you to “catch up” on these arrearages.  They can simply file for relief and then proceed with the steps to take back possession of their property (through foreclosure, repossession, etc.).  In a Chapter 13 bankruptcy you are allowed to cure these arrearages and protect your property.

In this situation, debtors could file for Chapter 7 bankruptcy and reduce their overall debt load once they receive a discharge.  Then, hopefully, they would qualify for Chapter 13 and would be allowed to propose a plan to cure their arrearages and pay these items back over a period of 3 to 5 years.  Debtors would not, however, be eligible for a discharge in this Chapter 13 having just received a discharge in the Chapter 7.  The second filing would allow the debtors to cure arrearages on a house or car loan or allow them to pay down on debts that were not eligible for discharge under the Chapter 7, such as student loans and/or tax debt.

From offices conveniently located in Athens, Douglasville, GainesvilleLawrenceville, Marietta and  Scottdale,  Jeff Field & Associates is able to help people throughout the Atlanta metropolitan area and beyond. To schedule an appointment call 404-381-1278 or contact us online.
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    Jeff Field & Associates, guided me through my Chapter 13 very smoothly. All my accounts and debt are paid off and my credit scores are all above 700! I highly recommend Jeff Field & Associates.

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    Mr. Fields and his staff was very professional and they explained everything so it was clear to me and they made sure I understood the process. I would recommend they to all my family and friends especially if they need a very good financial relief l...

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    It was definitely a process due to the COVID pandemic but I am so glad I chose Jeff Fields and Associates. Everyone from the office that I worked with was always polite and responsive to all my questions and needs. I was hesitant on filing because I ...

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