Should You File For Chapters 7 And 13 Consecutively?

The idea of filing for bankruptcy twice and consecutively might seem like a fairly outlandish thing to consider, but a bankruptcy lawyer might recommend under specific circumstances. If you're curious about the possibility of doing so, here's what you'll want to learn about it.

Why Would Anybody Do This?

Most scenarios where this is a desirable choice involve a balance of unsecured debts and secured ones. Generally, the person filing wants to have the court discharge the unsecured debts on things like utility bills and credit card debts. However, they also want to hold onto something that's secured, such as a house that's currently under a mortgage.


The goal is to go through Chapter 7 bankruptcy first. Ideally, the judge discharges your unsecured debts and then allows you to pursue a subsequent Chapter 13 case. In Chapter 13, you'd submit a restructuring plan for the secured debts. Presuming the court accepts the plan and you can make all of the payments, you'd be able to hold onto the secured assets while discharging a good chunk of your other obligations.

Process Matters

Note that nothing in bankruptcy law requires the judge to humor your plan. You will face additional scrutiny, and it is wise to work with a bankruptcy lawyer to answer all of the questions the court will almost certainly have about your plan. This process requires a lot of attention to when and how you file your petitions for the two different types of relief. It's also prudent to inform a judge of your intentions to do it this way before you get too far into the process. 

Possible Pitfalls

There are many issues to be aware of with this approach. Foremost, you don't want to enter into a restructuring plan that would accelerate large debts. If you restructure your debts under Chapter 13, you must be able to pay them within three to five years. Also, the timeframe is not flexible so you'd have to commit to it before the plan is approved.

Second, you should only do this if your debts are appropriately structured. If your debts are nearly all unsecured, there's a good chance you'd be better off just discharging everything and starting fresh right away.

Finally, it can be challenging to be the clock on foreclosure or repossession. If a creditor takes back the assets before you file Chapter 13, it may be impossible to keep them.