Long term effects of Dismissal and Re-Filing of Chapter 13/7

[ClearDaDebt]

Hello Friends,

I filed for Chapter 13 back in March, but due to some tax stuff I may need to ask for dismissal of the Chapter 13 and then file a new petition for Chapter 7. (I may be able to simply convvert the 13, but ti depends on how fast I can get the tax issue figured out vs how long I can continue the case)

I know that a dismissed Chapter 13 stays on the report for up to 10 years and has the same effect as a fully discharged bankruptcy. (Except with all the debt of course!)

I am wondering what the long term effects of possibly having a second Chapter 7 filing in the same year on the report will be?

Will I be unable to rebuild my credit as quickly, or do having the second one in such a close time span not really matter too much in the end?

Thanks!!

[FireMedic1]

"Before switching to Chap 7, you must clear an eligibility hurdle by passing the Chapter 7 Means Test. The means test looks at your income and expenses to determine if you can afford to pay some debts through a Chapter 13 plan. If you can, you won't qualify for Chapter 7.

Even though some courts don't require debtors to complete the means test before converting from Chapter 13 to 7, the Chapter 7 Trustee assigned to your case will evaluate your updated income and expense disclosures. If you have a significant amount remaining after subtracting your expenses from your income, either the trustee or a creditor will likely object on the basis that you have the means to pay something to creditors."

https://www.nolo.com/legal-encyclopedia/converting-your-bankruptcy-case-from-chapter-13-chapter-7.ht... 

Consult your lawyer.

[ghostVetFL]

We had to do the same thing in 2020. Both bankruptcy's show up on our credit, but we have made it back into the high 600's - low 700's (depending on the credit report). It will be rough for the first two years, but with good habits, you should be fine after that. Good luck.

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@ClearDaDebt wrote:

Hello Friends,

I filed for Chapter 13 back in March, but due to some tax stuff I may need to ask for dismissal of the Chapter 13 and then file a new petition for Chapter 7. (I may be able to simply convvert the 13, but ti depends on how fast I can get the tax issue figured out vs how long I can continue the case)

I know that a dismissed Chapter 13 stays on the report for up to 10 years and has the same effect as a fully discharged bankruptcy. (Except with all the debt of course!)

I am wondering what the long term effects of possibly having a second Chapter 7 filing in the same year on the report will be?

Will I be unable to rebuild my credit as quickly, or do having the second one in such a close time span not really matter too much in the end?

Thanks!!

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[Dinamashrya]

Hi! 

Were you able to qualify for a mortgage after the 2 year holding period with 13 dismissal and 7 Discharge reporting?

Thanks!