Filing a Chapter 13 after making it through a Chapter 7

[pdxgrrrl]

Hello,

It's been about three years since I visited this forum because I thought my financial problems were over after I filed for Chapter 7 and got my discharge. Boy, was I wrong.

When I thinking about filing three years ago, several attorneys told me I should file a Chapter 13 because of my significant tax problems. I ended up filing the 7 because I was severely underemployed at the time and couldn't afford to make payments to the trustee.

Well, now I have a regular gig, make a decent wage, but I'm in over my head again. I owe the IRS more than $23k and I'm making payments to the state at the rate of $225 a month which is a hardship. After my 7, I got hooked on credit cards again (ARGH -- I have EIGHT of them), and now I have a medical debt that I can't pay. (The collection agency is demanding $900 RIGHT NOW and I'm afraid I'll get sued.) And I owe my mom money. Plus, there's my $50k of student loan debt which can't be discharged.

From what I remember about BK law, it's possible to file a 13 a few years after filing a 7, am I right? I don't know what to do at this point. And I'm very mad at myself for getting myself into another mess.

[justbroke]

Yes, you can file a Chapter 13, but you will not receive a discharge. That means, the Chapter 13 would allow you to payoff your priority debt and payoff your unsecured debt. Your student loans would go into deferment as well. I see, less the student loans, $24K of debt and in a 36 month plan, you're talking at least a $667/month payment. Tack on Trustee and attorney fees, and you're probably close to $800/month.

If you can't make a $225 payment on the taxes, I don't see how you make a $800+ Chapter 13 payment. Perhaps you are truly are in hardship and need to deal with the IRS differently. Perhaps you should be in a non-collectable status.

I don't have a solution because it seems that you may not even have the income to support a Chapter 13. If only you could stretch it to 4 years between the filings, you could get that much needed discharge.

[SMinGA2]

To be eligible for a discharge in a ch. 13 after a ch. 7, you need to file the ch. 13 at least 4 years after the 7 was filed. My basic understanding is that you can file a ch. 13 now, but since you're not eligible for discharge it must be a plan that schedules all unsecured debt to be paid off during the plan. At most that can be 5 years. (Exception may be that student loans would not have to be paid in full since they're never eligible for discharge, but I don't know...)

Any possibility of getting a 2nd job? If you have reliable transportation pizza delivery can be a good money maker. (Speaking from personal experience - I've done that as a 2nd job for more than 2 1/2 years now.) Forget the credit cards for now, and concentrate on the IRS/state taxes. Hopefully your mother does not have a major need for the money she loaned you. Cut back where you can, look for ways to live more frugally, and do what it takes to survive the next year or so until you CAN file ch. 13.

[HHM]

One slight correction SMinGA2, a non-dischargeable chapter 13 need not pay the debt in full. Same rules apply, the chapter 13 would need to only pay priority debts during the plan.

Otherwise, you are correct. To have a dischargeable chapter 13, which is what Pdxgrrrl needs, it is 4 years from filing date to filing date. So the question is, how long has it been since you "filed" your chapter 7? If you are 3 or more years from the chapter 7, you should figure out a way to stick it out to the 4 year mark. If you still have a year or more to go before you reach the 4 year mark, it is a tougher call and will depend on the specifics of your circumstances. But all things considered, it sounds like you need to stick it out the 4 years to get a dischargeable chapter 13.