Timing of Chapter 13 after a Chapter 7 Bankruptcy

The Sixth Circuit Court of Appeals clarified a timing issue related to filing a Chapter 13 following the filing of a Chapter 7 (some used to refer to this as a Chapter 20 super discharge). The bankruptcy code requires four years to pass between filing a Chapter 7 and then getting a subsequent discharge in a Chapter 13, but the question has been whether the four years is measured from discharge date of the 7 to the filing date of the 13 or the more generous filing date to filing date. The Sixth Circuit has declared it to be from the filing date to filing date.

A debtor cannot discharge their debts in another Chapter 7 for eight years after an initial Chapter 7. In Kentucky, as the Sixth Circuit’s decision implies, one measures this from filing date to filing date and disregards the discharge date.

Now I want to highlight a subtle point: the bankruptcy code prevents there from being a discharge in a Chapter 7 or a Chapter 13 if that bankruptcy is filed within the timeframes outlined above. The code does not prevent a debtor from filing another bankruptcy. This this means that if you file Chapter 7 and receive a discharge of debt and then get behind on your houseparent three years after the filing date of the 7, you can file a Chapter 13, but you will not be able to receive a discharge of debt. Some debtors use this as a means of buying some breathing room to catch up on their house payments. Whether the filing of a Chapter 13 for such a purpose constitutes a good faith action is a topic for another post.