Chapter 20 Bankruptcy And What It Is

If you have ever found yourself thinking that filing for bankruptcy may be the best move you could make, then you surely must have heard about the fact that there are six main types of Chapters under which you can file for bankruptcy: Chapter 7, Chapter 11, Chapter 12, Chapter 13, Chapter 15 and Chapter 9. However, you may have heard about a so-called “Chapter 20 bankruptcy” as well and you wondered if this actually exists or if it is a scam.

The short answer is that “Chapter 20” bankruptcy does not exist in the proper sense of the word. However, it has become widely used nowadays and it actually refers to a tactic a bankruptcy lawyer may choose to play for the advantage of his/her client. This technique is mainly consisted out of filing for a Chapter 7 bankruptcy and then for a Chapter 13 one (or the other way around) and it is used when the client wants to reap all the benefits from both of these bankruptcy types.

This tactic can be used by the bankruptcy lawyer only in some cases and most often it is quite complicated. However, the advantages both of the bankruptcy declarations can bring the client with can be almost miraculous to some of you and you may feel tempted to ask your own bankruptcy lawyer about it as well.

To understand when the so-called “Chapter 20” is necessary, think of the fact that Chapter 7 bankruptcy will eliminate all the unsecured debt and you will only be left with the secured one (mortgage, car, and so on). However, if you cannot afford paying for these, then immediate foreclosure and repossession may occur from your creditors. To avoid this from happening, you can choose to file for Chapter 13 bankruptcy. Under this chapter, your range of benefits will be much larger than in the other case and you will be allowed to up to 5 years to catch up with your mortgage, as well as benefit from a lot of other things (such as paying IRS debts without interest and without any kind of penalties).

If you believe that you could do this financial move then ask your bankruptcy attorney dallas about it. He/she will most definitely know what you are talking about and he/she will be able to tell you if this tactic can be applied in your case or if it is simply not applicable due to various reasons.