How long can you be behind on an exempt property?

[tlk9]

Hello again,I have filed chap. 7 ,341 over waiting on my 60 days ,I was told at 341 by trustee that the only problem he sees is I have a rental property with around 7 or 8 k in equity,it is presently rented,I told him I wanted to keep it if I could as I purchaesd it from my deceased fathers estate, he was nice as said he would get back to me on it,My question is since I have been slow workwise this winter(contractor)I cannot sell anything to get by as i have in the past,I am behind 2 months on payment of said property,I have not been paying it as I dont want to give good money if I wont get to keep it,how will this reflect his decision? Thanks for all the help. Happy New Year.

[StaciMM]

I would think that by your not making payments it *might* eat into your equity and make it less worthwhile for the trustee. My logic is that your lack of payment will lead to extra interest accrual, not to mention that he would have to pay realtor fees to sell it.

That doesn't mean you're clear to keep it so easily though. Once you are discharged, if you are still behind, then the lender will likely start the foreclosure process.

[JimH]

Over the last three years, (still havn't filed) I have renegociated the payments on several different secured loans. Most are more than willing if they don't see much equity. I have been as far as 3 months behind and have been able to work something out. If you miss one payment though, they jump on you with both feet and all the arrears are immediately due again - so it's like starting all over if you are a couple days late on one payment. That's the part I'm tired of - I am always a couple payments away from being caught up when I have to break the agreement.

Another strategy I read is doing a "chapter 20", which is a ch 7 immediately followed by a ch 13. The chap 7 eliminates all of the unsecured debt plus any secured ones that you don't want to reaffirm. Then the ch 13 lets you get caught up on the debt that is left without losing the property to foreclosure. I'm not sure if this is an option under the new BK code.

This is all if you don't lose the property in the current ch 7.

[StaciMM]

Jim-

No more 20's, since the changes of 10/17. Now, after filing (and getting a discharge) of a ch. 7, someone can't file a 13 for 4 years, or another 7 for 8.

I understand that it wasn't uncommon to do that before, though. File 7, get rid of unsecured debts. And then, after that was discharged, file a 13 and put the past due payments on secured debt into a 3 year repayment plan.

[JimH]

Jim-

No more 20's, since the changes of 10/17. Now, after filing (and getting a discharge) of a ch. 7, someone can't file a 13 for 4 years, or another 7 for 8.

I understand that it wasn't uncommon to do that before, though. File 7, get rid of unsecured debts. And then, after that was discharged, file a 13 and put the past due payments on secured debt into a 3 year repayment plan.

I dug into this a little more because a ch 20 is something I am also looking at doing in my own situation. I believe they still can be done. It's just that many are confusing filing with discharge.


You are correct on the filing of 7's. The minimum time between filing Ch 7 cases is 8 years.

But I believe you are off on the filing of 13's. If a discharge has been granted in a Ch 7 case, a Ch 13 case apparently may be filed but before a discharge can be entered in the Chapter 13 case the debtors Ch 13 plan must continue until at least 4 years from the date of the Ch 7 discharge.

[StaciMM]

According to Bankruptcyaction.com:

A Chapter 13 can be filed if:

The debtor received a discharge under Chapter 7, 11 or 12 more than four years ago; or
the debtor received a discharge under Chapter 13 more than two years ago.

http://www.bankruptcyaction.com/chapter13.htm

Sorry, No more 20's...

[FoolAndHisMoney]

Yeah Jim, No more "so called chapter 20 filings" Since you filed a chapter 7 under pre Oct 17 law you can file again in 6 years. New chapter 7 filers will wait 8. As far as chapter 13 you can only file 4 years after your discharge date of your 7.

This chapter 20 thing was frowned upon by the courts and was considered abuse even though the old law allowed it.

[StaciMM]

Everything is based on what is in effect when you file. So, if someone files now and they've filed in the past, they have to go by the 8 year / 4 year / 2 year rules. 8 years between (completed, that is, a filing that ended in discharge) ch. 7's, 4 years after a ch. 7 for a ch. 13, and 2 years after a ch. 13 discharge before another ch. 13. I have no clue what the rule is for filing a ch. 13 and how long after that you can file a ch. 7.

Regardless of when you filed (old or new) if you file for ch. 7 (and complete to discharge) you can't file again for 8 years. So, if you filed on 10/1/05 you become eligible again on 10/1/13.

Technically, if someone filed on 1/1/99, they became eligible again on 1/1/05. But, if they did not file before 10/17, then NOW they are not eligible due to he 8 year rule. They can't file again until 1/1/07.

The only thing still important for 'old law' regarding filing is if you filed a ch. 13 under old law and situation changes so that you lose income, etc.-if you are able to convert to a 7, you convert based on laws in effect as of your file date. Same for the reverse-if you filed a ch. 7 in October, and you convert it to a 13, old laws are what you go by.

Yeah Jim, No more "so called chapter 20 filings" Since you filed a chapter 7 under pre Oct 17 law you can file again in 6 years. New chapter 7 filers will wait 8. As far as chapter 13 you can only file 4 years after your discharge date of your 7.

This chapter 20 thing was frowned upon by the courts and was considered abuse even though the old law allowed it.

I know we're mainly discussing for the sake of discussion only-I'm sure no one who has filed has ANY intention of needing this info!

[JimH]

Stacci / Foolandhismoney

Much due respect to both of you but the following is cut and pasted directly from the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 as posted on the government website. http://www.uscourts.gov/bankruptcyco...protection.pdfdischarges in ch 13's not filings . The time of filing a ch 13 can still happen imediately after a discharge in either a ch 7 or ch 13. A "chapter 20" is still a viable option in certain situations - it's just going to be a minimum of 4 years between the ch 7 discharge and the ch 13 discharge

[StaciMM]

I read it a little different Jim.

Under (f)(1), it is referring to ch. 13 plans. It says a discharge will not be granted if a ch. 7 discharge was granted during the 4 years preceding the date of the order for relief. The 'date of the order for relief' would be the file date.

I think you said you'll be speaking w/ an attorney this week. Be sure and post what he says.

[JimH]

The 'date of the order for relief' would be the file date.

Damn.... foiled again....

Well tlk9, looks like you should try to work something out with the lender - assuming you get to keep the property. I'll be 6 months behind by the time mine goes through so I might have to reconsider my options. I really don't want to file ch 13 just because I want to keep it simple.