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.
Just as all rivers run to the sea, all bankruptcy cases run to a bankruptcy discharge. Unless they don’t…which probably means that the case has been dismissed.
If you are a creditor, there is a big difference between a bankruptcy discharge and a bankruptcy dismissal.
A discharge means there is no (or modified) liability for the borrower’s debts, usually under 11 U.S.C. 727, 1141, or 1328. Simply put, a “discharge” means that the debtor wins and doesn’t owe the debt any more.
A dismissal generally means that something has gone wrong in the case (such as a payment default under a Chapter 13 Plan or some failure by the Debtor to comply with the Bankruptcy Code) and, as a result, the bankruptcy case is going to prematurely end…without a discharge. Here, the creditor wins because the debtor doesn’t get a discharge, and the debt remains due and owing.
This may be an obvious distinction, but it wasn’t to me on the first day I practiced bankruptcy law. Considering the absolutely polar-opposite results the two outcomes have for creditors, however, I learned this important lesson quickly.