Bankruptcy Discharge: You Only Get One Every Eight Years

Sometimes people need to hit the “reset” button more than once, even in Bankruptcy Court.

How quickly can an individual who has received a Chapter 7 discharge obtain a new Chapter 7 discharge?

The answer is in 11 U.S.C.A. § 727(a)(8), which provides that the Bankruptcy Court shall grant a discharge, unless:

(8) the debtor has been granted a discharge under this section, under section 1141 of this title, or under section 14, 371, or 476 of the Bankruptcy Act, in a case commenced within 8 years before the date of the filing of the petition;

So, the quick answer is that you count out 8 years from the date that the individual filed the first case in which he or she received a Discharge. Note: You don’t count the 8 years from the last discharge, but, instead, from the date that the earlier case was filed.

This is why you see what some people refer to as “Chapter 20” bankruptcy cases, in which a debtor receives a discharge in Chapter 7 and then immediately (or soon thereafter) files a subsequent Chapter 13 case. The debtor doesn’t get a discharge in the Chapter 13, but can get the other benefits of Chapter 13, like stretching out the amortization of a debt that was reaffirmed in Chapter 7 or obtaining a stay from collection on liens or reaffirmed debts.

This is a change from earlier law, which set the time period between discharges using a 6 year period.

Another side issue to consider: under 11 U.S.C.A. § 1328(f)(1), the debtor in a subsequent Chapter 13 will not receive a discharge in that Chapter 13 if he or she received a discharge under 7 or 11 in a case filed under 7 or 11 during the 4 year period preceding the Chapter 13 filing.

Snake Eyes for Gamblers: Gambling Debts are Enforceable in Tennessee, Where the Debts arose in a State Where Gambling is Legal

Gambling is illegal in Tennessee, and, as a result, Tennessee courts will not look kindly on lawsuits to enforce gambling debts.  This includes gaming losses and debts incurred for the purpose of gambling (i.e. a loan from a casino for in-house gambling).

This hostility is codified in Tennessee statutes.  Tenn. Code Ann. § 29-19-101 provides that: “All contracts founded, in whole or in part, on a gambling or wagering consideration, shall be void to the extent of such consideration.” Tenn. Code Ann. § 29-19-102 states: “No money, or property of any kind, won by any species or mode of gambling, shall be recovered by action.”

To show how serious they are, there’s Tenn. Code Ann. § 29-19-103, which imposes a $100 fine against any person who files a lawsuit based on a gambling debt.  In fact, the next statute, Tenn. Code Ann. § 29-19-103 says that a losing gambler can sue to recover his losses in an action.

But, Tennessee Courts have allowed lawsuits to collect gambling loans and losses where the gambling debts were incurred in a state where gambling is legal.

This is seen in both: (1) lawsuits filed  by out-of-state casinos to enforce gambling debts in Tennessee (see Robinson Prop. Grp., L.P. v. Russell, W2000-00331-COA-R3CV, 2000 WL 33191371 (Tenn. Ct. App. Nov. 22, 2000); and (2) enforcement actions to domesticate foreign judgments based on gambling debts (see Mirage v. Pearsall, 02A01-9609-CV-00198, 1997 WL 275589 (Tenn.Ct . App.1997).

The courts have found that it’s not contrary to Tennessee public policy to allow enforcement of gambling debts in Tennessee, where the gambling loans/gaming contracts were entered into in a state where gambling is legal.

The Tennessee Court of Appeals has reasoned “it would be a great injustice if Tennesseans could reap the benefits of gambling in states where it is legal when they are successful, but seek shelter in Tennessee courts when they lose.”

Keep in mind, however, if you file a lawsuit to enforce a gambling debt incurred in Tennessee–where gambling is illegal–it’s no crap-shoot: you’re probably going to have to pay the $100 fine.