Not Elgible for Discharge -What does that mean?

[PAT36]

Hello everyone,

I filed a chapter 13 3 1/2 years ago I paid it for 2 1/2 years and then converted to a chapter 7 with a discharge.

Had a job/contract reduction fell behind and proceeded to file a chapter 13. I was told I could file a chapter 13 but I am not eligible for a discharge. I was told that I would have to repay all creditors (which is fine because I have less than $4K unsecured debt) my main debts include my house and car.

I read a recent case filing where a bankruptcy judge determined that not being eligible for a discharge does not make a debtor ineligible for relief under chapter nor can a debtor be denied confirmation of a plan that would otherwise be confirmed.

However I am not real clear as to what it all actually means.

Does it mean that I can get relief and a plan confirmed. I must make the payments according to the plan but I will not be discharged from the unsecured debt?

Is it basically a way for me to catch-up on my arrears?

Thanks In Advance.

[lrprn]

Does it mean that I can get relief and a plan confirmed. I must make the payments according to the plan but I will not be discharged from the unsecured debt?

The current bk law clearly states that you must wait four years from the date you filed your Chapter 7 before you can file a Chapter 13 that will result in a discharge. You didn't wait that long, so although you can file a Ch 13 plan and have it confirmed, you will pay the debts back 100% in your plan.

Since you've found yourself in this situation now three times in five years, it's time to take a cold, hard look at your finances.

Since you are not maintaining yourself financially after having all your unsecured debts discharged, then you are likely carrying too much secured debt for your income. You need to get enough into savings to tide you over the lean job times without filing bk to hold off your creditors. If you don't change this pattern, you may keep repeating this cycle with more and more scrutiny each time because now you are a repeat filer.

As hard as it is to consider, think about whether keeping your home is really in your best interests right now, especially if you owe more on the house than it's worth. If you surrender your house and rent instead so you can get some money saved, that might be a better option than continuing to file bankruptcies because your irregular income can't support the debt load you have at the moment.

I'm not trying to be harsh or judgmental....it's just sometimes it's hard to see the reality of the big financial picture when you are scrambling in the small details. If I'm way off base here, then set me straight. Keep asking questions - we'll help you sort things out as much as we can.

[PAT36]

The current bk law clearly states that you must wait four years from the date you filed your Chapter 7 before you can file a Chapter 13 that will result in a discharge. You didn't wait that long, so although you can file a Ch 13 plan and have it confirmed, you will pay the debts back 100% in your plan.

Since you've found yourself in this situation now three times in five years, it's time to take a cold, hard look at your finances.

Since you are not maintaining yourself financially after having all your unsecured debts discharged, then you are likely carrying too much secured debt for your income. You need to get enough into savings to tide you over the lean job times without filing bk to hold off your creditors. If you don't change this pattern, you may keep repeating this cycle with more and more scrutiny each time because now you are a repeat filer.

As hard as it is to consider, think about whether keeping your home is really in your best interests right now, especially if you owe more on the house than it's worth. If you surrender your house and rent instead so you can get some money saved, that might be a better option than continuing to file bankruptcies because your irregular income can't support the debt load you have at the moment.

I'm not trying to be harsh or judgmental....it's just sometimes it's hard to see the reality of the big financial picture when you are scrambling in the small details. If I'm way off base here, then set me straight. Keep asking questions - we'll help you sort things out as much as we can.

Thanks for your info. I will say you made a lot of incorrect assumptions but it's ok.

Renting is not cheaper for me. And this is only my second filing in 5 years not 3rd. I filed a 13 paid on it for 2 1/2 years and then converted the same case to a 7. (unless you are counting this as 2 filings)

I had too much debt the first time; this time it was not a debt issue. Not being able to replace a major source of income after a 6 month period will cause a few problems. I had a savings and used it to stay afloat during the lean job times. I would think that my unsecured debt is rather low considering that it includes credit card payments, utilities and a student loan.

Anyway I don't have a problem paying back 100%. I took on a PT job so that I can expedite my comeback.

Again, thanks for the info I just wanted to make sure I understood it correctly.

[HHM]

I don't think lrprn made any illegitimate assumptions. In essence, you have have filed 3 BK's in the last 3 1/2 years, chapter 13...which you couldn't complete, converted to a 7 (which I assume we can conclude was discharged) and here you are less than a year after filing chapter 7, filing for ANOTHER chapter 13.

Let's face it, something doesn't add-up.

Frankly, and I have said this in other posts, CHAPTER 13 is not the way to deal with secured debt...and if you have only $4k in unsecured...then you really do need to take a look at your situation objectively. Frankly, $4k in unsecured debt, in the grand scheme of things is nothing, yet now you are in a non-dischargable chapter 13 (which is not a good thing, because all future earnings are subject to the BK estate) but your underlying problem, the amount of your "secured" debt seems to be burying you financially.

[SinkingFast]

yet now you are in a non-dischargable chapter 13 (which is not a good thing, because all future earnings are subject to the BK estate)

Eeewwww!! That sounds scarey!!

The BK Court can really lay claim to future earnings in a "Non Dischargeable" Ch 13??!!

[PAT36]

I don't think lrprn made any illegitimate assumptions. In essence, you have have filed 3 BK's in the last 3 1/2 years, chapter 13...which you couldn't complete, converted to a 7 (which I assume we can conclude was discharged) and here you are less than a year after filing chapter 7, filing for ANOTHER chapter 13.

Let's face it, something doesn't add-up.

Frankly, and I have said this in other posts, CHAPTER 13 is not the way to deal with secured debt...and if you have only $4k in unsecured...then you really do need to take a look at your situation objectively. Frankly, $4k in unsecured debt, in the grand scheme of things is nothing, yet now you are in a non-dischargable chapter 13 (which is not a good thing, because all future earnings are subject to the BK estate) but your underlying problem, the amount of your "secured" debt seems to be burying you financially.

I appreciate your admonishment however it is not cheaper for me to rent here (dumping my secured debt). Secondly I am not looking at my situation with rose colored glasses. It is not like I went out and ran up up a bunch of debt again. I was without income for about 6 months during that time I was able to keep my depths up via the reserves that I saved but that ran out and I got behind.

I asked this question because I wanted a clearer understanding of what the term meant; not because I am happy, satisfied, or complacent in my situation or that I am not looking at the pattern of being/becoming a repeat filer. I have analyzed and dissected my situation and I am working toward not just paying back but resolving the problem. I just did not lay all of that out in my post. I was trying to get a clearer understanding. You are pointing out things that I have already personally identified. The assumption seems to be that I have not analyzed or identified where I am and the problem.

I do appreciate the clarification and even the admonishments.

[HHM]

Eeewwww!! That sounds scarey!!

The BK Court can really lay claim to future earnings in a "Non Dischargeable" Ch 13??!!

Yes, but only up to the amount of the claims that get filed in a chapter 13.

[HHM]

I appreciate your admonishment however it is not cheaper for me to rent here (dumping my secured debt). Secondly I am not looking at my situation with rose colored glasses. It is not like I went out and ran up up a bunch of debt again. I was without income for about 6 months during that time I was able to keep my depths up via the reserves that I saved but that ran out and I got behind.

I asked this question because I wanted a clearer understanding of what the term meant; not because I am happy, satisfied, or complacent in my situation or that I am not looking at the pattern of being/becoming a repeat filer. I have analyzed and dissected my situation and I am working toward not just paying back but resolving the problem. I just did not lay all of that out in my post. I was trying to get a clearer understanding. You are pointing out things that I have already personally identified. The assumption seems to be that I have not analyzed or identified where I am and the problem.

I do appreciate the clarification and even the admonishments.

I understand...the root cause is loss of income, not the secured debt per se...but the issue is the failure to adjust your "living" standards to your new reality, I think that is where the admonishment comes in to some degree.

Hopefully, you have/can obtain a new income stream that was the same as before (but still, 6 months of no income does not seem to account for 3 1/2 years of BK's) However, let's face it, you filed chapter 13 3 1/2 years ago (which meant that spending, at some point, got out of hand, maybe it was business related, maybe it was lifestyle). Then you had a loss of income, and converted to a 7 which dealt with the bulk of your unsecured debt. Now, (although the timeline is a little unclear) you are back in a chapter 13, I can only guess that you filed chapter 13 to save assets on which you were behind payments (and because you were otherwise ineligible for chapter 7). That means you must have some income.

Many people who file BK, and many on this forum can attest...that only way for BK to work for you is if your income meets your living standards...if it doesn't, you either need more income (which is hard to do) or decrease your expenses. Based on your BK history, the "lack of objectivity" appears to be in decreasing your living expenses.

But your right, I do not have all the details of your particular situation, but with the many years being around the BK world, patterns tend to repeat.

[PAT36]

Based on your BK history, the "lack of objectivity" appears to be in decreasing your living expenses.

But your right, I do not have all the details of your particular situation, but with the many years being around the BK world, patterns tend to repeat.

Dang, I almost hate I even asked the question
because I did not know it would lead to so many harsh assumptions. I have many personal/family circumstances that put me back in this situation this time of which I did not want to post on a public message board. I have beat myself up enough over this (regarding the things I could control) and I am not willing to allow others to do the same(in particular when they are missing most of the facts).

At this point if you think I am not objective, or that I am in denial, not being realistic or whatever then so be it. I have cut my living expense by almost 50% and taken several major steps to remedy this cycle. I respect your experience, but I did not think I needed to go into the specific financial details of every action or remedy that I've taken in asking a question;Nevertheless forgive me for the intrusion.

[lrprn]

Dang, I almost hate I even asked the question because I did not know it would lead to so many harsh assumptions.

Pat, honestly we aren't trying to be harsh.

You are very aware of all your unique personal circumstances - we knew almost nothing because you chose not to share anything about what you've already done to improve your standing. We don't need to know the nitty-gritty specifics, but it would have helped us to know you've already cut your expenses back 50%.

99% of the time the problem with multiple filings is exactly what HHM and I have both already noted - too little income or too high expenses. Turns out you happen to be in the 1% who understands and has already been trying to do what's necessary to get out of the hole.

If you had lurked after joining the forum for a few days to get the dynamics of this board, you would have discovered that we mods will often ask some hard questions if a situation seems to warrant it. We ended up making you angry instead. Wish that could have been avoided.

I hope you keep posting questions as you feel the need...next time we'll ask for more "de-identified" information first since we now know you don't want to share very much info about your case online.

I wish you the very best of luck with your second Ch 13.

[freshstart06]

Wow!!!!

[leftyf]

Calm down now...it's just an internet forum.

[$$only4ever]

I never viewed filing bankruptcy as a revolving door. Once is enough for me.

[alwaysmordrbils]

Re:Not Elgible for Discharge - What does that mean?

Sorry that you seem to be getting judged harshly here. I wanted to let you know that you're not alone in having to file more than one time.

I filed a chapt 7 due to medical bills back in 2000, then had to file a chapt 13 due to more medical bills back in 2005. I'm now 2 years into replayment on a 3 year plan, and my outstanding medical bills are causing me to think about a conversion to chapt 7 now.

Sometimes it's NOT because of overspending, and being frivalous, but life in general. For me it's my son's father not wanting to pay his share of the medical, and paying CS late, along with having a special needs child. For others it may be loss of a job.

I can assure you that you're probably a lot harder on yourself because of this than anyone else could be....It's hard to be in a position like this, when you try to do the right thing (saving) and then something unforeseen wipes that out.

Hang in there, and good luck to you!!! Remember, there's a lot more out there like us that choose not to speak up.

Alwaysmoredrbils.