Prior to the legislative changes to the bankruptcy code in 2005, commonly
referred as “BAPCPA”, a debtor could file a chapter 7 bankruptcy
in order to discharge their unsecured debt then subsequently file a chapter
13 to restructure secured debt – often times stripping a second
mortgage and home equity lines of credit. Chapter 20 is the colloquial
term for when a chapter 7 is followed by a chapter 13.
There was a division amongst the bankruptcy courts within the Eleventh
Circuit’s jurisdiction (Alabama, Florida and Georgia) as to whether
a chapter 20 is permissible post BAPCPA. Judges Glenn and Williamson of
the Middle District of Florida and Judge Mullins of the Northern District
of Georgia held that a chapter 20 is permissible post BAPCPA. However,
debtors in the Southern District of Florida were not permitted to file
successive – an
en banc panel of judges (before the entire panel of Judges) in the Miami district
and Judge Olson in Fort Lauderdale held that a debtor is not eligible
for a discharge in the subsequent chapter 13.
Luckily for debtors residing in the Southern District of Florida, the Eleventh
Circuit adopted the Middle District’s holding:
http://media.ca11.uscourts.gov/opinions/pub/files/201310558.pdf allowing the filing of chapter a 20 bankruptcy post BAPCPA. For debtors
who may not be eligible to file a chapter 13 due to eligibility requirements
or are unable to propose a feasible plan, a chapter 20 may allow them
achieve their objective of restructuring their secured debts.