There’s an old joke about a washing machine repairman who, with just one push of a button on the back of the appliance, was able to get the machine back into perfect working order. The bill he presented to the homeowner: $601.00. Aghast, the woman asked, “$601.00 just for coming out here and pressing a button?” “Well,” explained the repairman with a little smile, “my pressing the button only cost you $1.00. But knowing which button to press? That’s what costs $600.00!”

I’ve written before about why, in the vast majority of cases, it does not make good sense to file bankruptcy in Indiana without the help of a bankruptcy attorney. Just to reinforce that point, here’s a case where specialized knowledge made all the difference in the world to a person filing not just one, but two bankruptcy cases back to back!

By way of background, bankruptcy law states that a person cannot receive a bankruptcy discharge within a certain number of years of receiving a prior chapter 7 bankruptcy discharge. But, in this particular situation, the goal was not getting a discharge, but getting the automatic stay of collection activity. It took a skilled and experienced bankruptcy attorney to design a plan that would accomplish that goal within both the spirit and the letter of the law.

In this true story the debtor (whom I’ll call Bud) had two kinds of debt, each quite substantial. One type was “non dischargeable”, a combination of student loans and back taxes owed for the preceding three years. The second type consisted of unsecured debt. Neither a Chapter 7 nor a Chapter 13 bankruptcy filing alone would have given Bud a fighting chance to get back on his feet. Instead, with the advice of his bankruptcy attorney, he filed a Chapter 7 case first, then some months later, a Chapter 13 bankruptcy. (U.S. bankruptcy attorneys call this a Chapter 20.)

The result was a discharge of many of the unsecured debts, so that Bud was able to make Chapter 13 payments and still keep up with repaying the taxes and student loans, while utilizing the benefits of Chapter 13 law.. One knowledgeable attorney, knowing “which button to push” – and in what order – made the difference here between a hopeless situation and a plan that allowed our friend Bud to rebuild his life.