Chapter 20

There is no Chapter 20 in the bankruptcy code, and you can't go file a "Chapter 20."  But for many people, what we call a Chapter 20 is the best solution.

What is a Chapter 20?  A Chapter 7 plus a Chapter 13 (7 + 13 = 20).  First, you file a Chapter 7 to discharge personal liability on secured debts and discharge unsecured general creditors.  Then, we file a Chapter 13 to reorganize what is left over.  The Chapter 13 doesn't result in a discharge, but that is alright - the Chapter 7 provides that protection.

So, why bother?  For many folk, the debt limits in Chapter 13 prevent them from filing -- they owe too much on their bills, and would be forced into a Chapter 11, and a Chapter 11 isn't worth the headache, costs, and struggle.  So, the Chapter 7 gets filed, and we get rid of that debt.

However, maybe you really need the tools Chapter 13 affords you - stripping a second mortgage, paying off taxes, modifying a horrendous interest rate on your vehicle.  So once the Chapter 7 is completed, the (now eligible) Debtor files for Chapter 13 reorganization to help get their affairs in order.