Chapter 7 + Chapter 13 = Florida “Chapter 20” Bankruptcy

Update on Change to Florida Bankruptcy Law:

The Chapter 20 bankruptcy, or the practice of filing a Chapter 7 and then a subsequent Chapter 13, has been eliminated, at least for now. Whether a Chapter 20 bankruptcy will once again be available to Florida bankruptcy filers is on appeal to the 11th Circuit Court of Appeals. We will update this page as new information becomes available. A Chapter 20 was just one of the many options that Florida bankruptcy lawyers were using to meet the needs of bankruptcy clients and several options still remain for Orlando area residents seeking a fresh financial start.


A “Chapter 20” filing is the nickname given to filing for both Chapter 7 and Chapter 13 bankruptcy relief. There is no provision in the Bankruptcy Code named Chapter 20, and courts around the country have been divided on precisely how a Chapter 20 functions. But the dual-filing may be the best solution for individuals with high amounts of unsecured debt such as credit cards who also want to strip a second mortgage on a home or need time to get caught up on missed payments.

First Comes a Florida Chapter 7 Bankruptcy

Chapter 20 bankruptcy starts with the filing of a Chapter 7 and receipt of a certificated of discharge. Chapter 7 is useful for eliminating unsecured debt, like credit card bills.

For secured claims, like a mortgage, the Chapter 7 does not affect the rights of the creditor. If you were behind in your house payments, your mortgage lender could still foreclose on the property once the automatic stay is lifted.

Then, a Florida Chapter 13 Bankruptcy

Once the unsecured debts are discharged through a Chapter 7, a Chapter 20 bankruptcy involves filing a subsequent Chapter 13 bankruptcy. A Chapter 13 allows for time to pay back any overdue payments (arrearages) and/or strip a second mortgage.

There are specific requirements for successfully pursuing a Chapter 20 bankruptcy, including issues of timing of the both bankruptcy filings as well as income limitations in order to qualify for a Chapter 7 bankruptcy. The Means Test, used to determine whether you are eligible for a Chapter 7 filing, limits Chapter 7 relief to those whose household income is below a certain level.

Which Equals a Florida Chapter 20 Bankruptcy

Chapter 20, in some circumstances, can be used to eliminate a second mortgage on your house if your home is “underwater” and you owe more on your first mortgage than it is now worth. Courts have issued conflicting opinions in various districts around the country and the state of the law is very fluid. But, for those who do qualify for a Chapter 7 bankruptcy relief and who also want to remain in their homes, a Chapter 20 dual-filing may be an option to consider.

Because of means testing, income limits, filing costs and timing constraints, a Chapter 20 is a complex matter, and the best way to determine if it will work for you, is to speak with an experienced bankruptcy attorney. They can examine your particular facts and help you decide it Chapter 20 makes sense for you.