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January 25, 2009

6th Circuit Rules on Discharge in Chapter 13 after Receiving Discharge in Previous Chapter 7

In re Sanders,  --- F.3d ----, 2008 WL 5386525 (6th Cir. December, 2008)

Issue:   When the debtor files a chapter 7 and later a chapter 13, does the four year bar on a second discharge in Section 1328(f) run from filing date to filing date or from discharge date in the chapter 7 to the filing date in the chapter 13?                  

Holding:    Filing date to filing date.    

“On July 29, 2002, Sanders filed a voluntary petition for bankruptcy under chapter 7.  The bankruptcy court granted him a discharge on February 5, 2003.  On January 5, 2007, Sanders filed a second bankruptcy petition, this time under chapter 13, seeking confirmation of his debt-repayment plan and a second discharge.”  The chapter 13 trustee objected to the discharge.  The bankruptcy judge denied the discharge in the chapter 13 on the basis that he had received a discharge in the chapter 7 within the previous four years.  Section 1328(f)(1).  The district court reversed.

The court of appeals affirmed the district court.  “As we see it, the four-year prohibition began when Sanders filed his first petition, not when he received his first discharge.”  Section 1328(f) states: “(f) Notwithstanding [chapter 13's provisions authorizing discharges], the court shall not grant a discharge of all debts provided for in the plan ... if the debtor has received a discharge- (1) in a case filed under chapter 7, 11, or 12 of this title during the 4-year period preceding the date of the order for relief under [chapter 13], or (2) in a case filed under chapter 13 of this title during the 2-year period preceding the date of such order.”  The trustee argued that the debtor “received the discharge” within 4 years.  The court's analysis is not too exciting.   
    

January 25, 2009 in Other Circuit Briefs | Permalink

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