When people think about filing for bankruptcy, they typically think of Chapter 7 or Chapter 13. But there’s a lesser-known strategy that combines both — sometimes called Chapter 20 bankruptcy. For Ontario, CA residents dealing with a complex mix of dischargeable and non-dischargeable debts, Chapter 20 may offer a path forward when neither chapter alone can get the job done.

What Is Chapter 20 Bankruptcy?

Chapter 20 isn’t an official chapter of the U.S. Bankruptcy Code — the name comes from adding 7 and 13 together. It refers to a two-step strategy in which a debtor first files Chapter 7 to eliminate qualifying dischargeable debts, and then files Chapter 13 shortly afterward to address the debts that remain.

The logic is straightforward. Chapter 7 wipes out unsecured debts like credit cards and medical bills quickly, reducing the overall debt load. Once that discharge is complete, a Chapter 13 repayment plan becomes much more manageable because there’s far less to repay. This sequencing can make Chapter 13 plan payments affordable for people who otherwise couldn’t sustain them.

What Kinds of Debts Does Chapter 20 Address?

Chapter 20 is particularly useful when a debtor has a significant amount of non-dischargeable debt that Chapter 7 alone cannot eliminate. Common examples include mortgage arrears, certain tax obligations, child or spousal support arrears, and debts tied to fraud or drunk driving judgments.

After Chapter 7 discharges the dischargeable debts, the follow-up Chapter 13 filing gives the debtor a structured way to catch up on those remaining obligations over a three-to-five-year plan. For Ontario residents who are behind on their mortgage and also carrying heavy credit card or medical debt, this combination approach can be a practical solution.

Who Might Qualify for Chapter 20?

Not everyone is a candidate for Chapter 20, and timing matters. To file Chapter 13 after a Chapter 7 discharge, you must wait until the Chapter 7 case is fully discharged before the second filing. Additionally, because you recently received a Chapter 7 discharge, you will not be eligible for a Chapter 13 discharge in the follow-up case — but that may not be the goal. The purpose of the Chapter 13 in this scenario is often to cure arrears and protect secured property rather than to discharge additional debt.

Eligibility for the Chapter 13 portion also depends on your income and debt levels meeting the requirements set by the Bankruptcy Code. An experienced bankruptcy attorney can evaluate whether the timing and structure of a Chapter 20 approach makes sense for your specific situation.

Is Chapter 20 the Right Strategy for You?

Chapter 20 is not a one-size-fits-all solution, but for the right candidate it can be remarkably effective. If you’re an Ontario resident who has struggled to qualify for a workable Chapter 13 plan because your total debt load is too high, or if you need to shed unsecured debt before you can realistically commit to a repayment plan, Chapter 20 deserves a closer look.

At Winterbotham Parham Teeple, a PC, we have been helping Southern California residents navigate complex bankruptcy strategies for over 30 years. Our debt relief offices serve Los Angeles, Orange, Riverside, and San Bernardino counties, and we offer free consultations to help you understand all of your options.

Call 800.400.9000 today to speak with an experienced bankruptcy attorney — we’re available 24/7 to schedule your appointment.