Can a Person File Chapter 13 While in a Chapter 7 Bankruptcy Term?
The Bankruptcy Code is the set of rules and regulations established by the federal court to guide states when they deal with bankruptcy cases. You can file for different types of bankruptcy, depending on your needs and qualifications. The most common types that individuals file are Chapter 7, which is debt elimination and Chapter 13--debt repayment.
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Chapter 13
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Chapter 13 is called debt repayment because it allows debtors to repay their creditors at lower interest rates. To file for Chapter 13, you must present before the court a repayment plan in which you explain how you intend to pay your creditors in a period of three to five years. Once the court approves your case, you must start making your payments in the period of time determined by the court and according to your plan. The court gives the discharge of your debts after this period of time is over and after you finish paying your debts.
Chapter 7
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Chapter 7 is known as debt elimination because it eliminates all the debts that the court discharges. However, not all debts are dischargeable under Chapter 7. Student loans, alimony, child support and taxes owed are examples of nondischargeable debts. If the court approves your case, you will lose all the assets and property you have that are not protected by the bankruptcy laws in your state, since the court sells them to pay your creditors. To file for Chapter 7, your income must be lower than or equal to the average for someone in your state in similar family circumstances, and you must receive credit counseling within 180 days before you file.
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Chapter 13 While in Chapter 7
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The Bankruptcy Code specifies that you are allowed to refile for bankruptcy as long as your first filing process is over and you have waited a certain amount of time before doing it again. You cannot file for Chapter 13 if you are in the process of filing for Chapter 7. However, you can file for Chapter 13 four years after you have received a Chapter 7 discharge. If your first filing was also a Chapter 13, you must wait two years before you file for Chapter 13 again.
Refiling Requirements
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To refile for Chapter 13, you must meet the same requirements as if you were filing for the first time. You must receive credit counseling from an approved agency within 180 days before you file. You must also prepare and present before the court a plan that explains how you are going to pay back your creditors over a period of three to five years. Your unsecured debts must not exceed $360,475, and your secured debts must not exceed $1,081,400.
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