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.
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