The 1328(f)(1) Bar Explained
Section 1328(f)(1) prevents you from receiving a Chapter 13 discharge if you received a Chapter 7 discharge in a case filed within the 4 years before filing the new Chapter 13 case.
This 4-year bar is measured from filing date to filing date, just like all other discharge bars. If your Chapter 7 was filed more than 4 years ago, you are eligible for a Chapter 13 discharge.
Why this matters: The 4-year bar is half the length of the 8-year Chapter 7 bar. For debtors who received a Chapter 7 discharge but have new financial problems, Chapter 13 becomes available years before another Chapter 7 would be.
The "Chapter 20" Strategy
Filing Chapter 13 after a Chapter 7 discharge is commonly called a "Chapter 20" case (7 + 13 = 20). This is a legitimate and widely-used strategy. Here is why it works:
- Chapter 7 eliminates unsecured debt - credit cards, medical bills, personal loans
- Chapter 13 addresses secured debt - cure mortgage arrears, strip junior liens, restructure car payments
By filing Chapter 7 first, you discharge your unsecured debts. Then the Chapter 13 plan only needs to address secured debts, making the plan payments much more manageable.
Timing trap: If you file the Chapter 13 within 4 years of the Chapter 7 filing date, you can still file the case and get the automatic stay - but you will not receive a discharge at the end. You would complete 3-5 years of plan payments without the benefit of a discharge.
When Chapter 20 Makes Sense
- Behind on mortgage - Chapter 7 clears unsecured debt; Chapter 13 cures the arrearage over 3-5 years
- Strip a junior lien - In many circuits, you can strip a wholly unsecured second mortgage in Chapter 13 after the Chapter 7 eliminates personal liability
- Tax debt management - Priority tax debts that survived Chapter 7 can be paid through a Chapter 13 plan
- New debts after Chapter 7 - If you incurred new debts after your Chapter 7 discharge, Chapter 13 can address those
Limitations of Chapter 20
Courts scrutinize Chapter 20 cases for good faith under Section 1325(a)(3). Filing Chapter 13 solely to delay creditors without a legitimate reorganization purpose may result in dismissal. The debtor must propose a confirmable plan in good faith.
Additionally, if you file the Chapter 13 within the 4-year window (before you are eligible for a discharge), be aware that the automatic stay may be limited to 30 days under Section 362(c)(3) if your prior Chapter 7 case was pending within the past year.
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Related Resources
section1328.org - Chapter 13 discharge rules and the superdischarge
Ch.7 to Ch.7 - The 8-year alternative under 727(a)(8)
automaticstay.org - Automatic stay limits for repeat filers
chapter13plan.org - How Chapter 13 repayment plans work