Sixth Circuit Court of Appeals Holds That Date of Chapter 7 Filing Begins Four-Year Bar on Chapter 13 Discharge

The Sixth Circuit recently addressed whether the Bankruptcy Code’s prohibition on receiving a Chapter 13 discharge within four years of a prior Chapter 7 discharge begins to run when the Chapter 7 petition is filed or when the discharge is granted.

In the case of In re Sanders,¹ the debtor sought confirmation of a debt-repayment plan and a Chapter 13 discharge. The trustee, however, opposed the Chapter 13 discharge because the debtor had received a Chapter 7 discharge within the prior four years. Although the debtor’s Chapter 7 petition was granted within the prior four years, that petition was filed more than four years before the filing of his Chapter 13 petition. The question before the Sixth Circuit was whether the four-year limitation of 11 U.S.C. § 1328(f) begins to run when a Chapter 7 petition is filed or when the petition is granted. In answering this question, the Sixth Circuit held that the four-year limitation in §1328(f) begins to run when a Chapter 7 petition is filed. For that reason, the Court rejected the trustee’s challenge and held that the debtor was not prohibited from pursuing his Chapter 13 petition.

Posted by: Matthew J. Horwitz

Categories: Bankruptcy & Banking Law