While filing for bankruptcy relief is a major decision that one should fully understand prior to moving forward, filing for bankruptcy a second or even third time takes even further analysis and discussion to fully educate yourself on the options. Specifically speaking, there is no stated rule that disallows a person from filing for bankruptcy relief multiple times. However, there are important things that need to be considered.
Filing For Bankruptcy Multiple Times Under The Same Chapter
If your prior bankruptcy case was filed under Chapter 7 of the Bankruptcy Code, there is no rule that forbids you from filing under Chapter 7 again within any period of time after the prior case. However, if you received a discharge in the prior case, which is generally the goal of filing for Chapter 7, you can’t file another Chapter 7 case if you are seeking a discharge in the new case for 8 years after the prior case. The dates are based on the actual filing date.
If your prior bankruptcy case was filed under Chapter 13 of the Bankruptcy code, again, there is no rule that forbids you from filing under Chapter 13 again within any set period of time after the prior case was filed. Similar to the rule for repeat Chapter 7 filings, the analysis hinges on whether you received a discharge in the prior case and whether you are seeking a discharge in the new Chapter 13 case. If that is the case in that you received a discharge in the prior Chapter 13 case and are now seeking a discharge in the new Chapter 13 case, the waiting period between case filings must be two years. Meaning, if you filed a Chapter 13 bankruptcy and received a discharge in that case, you would need to wait at least two years from the date the prior case was filed in order to file a new Chapter 13 case if you are seeking a discharge in the new Chapter 13 case.
Filing For Bankruptcy Multiple Times Under A Different Chapter
If you are considering filing for bankruptcy relief under a different chapter than your prior case, the timing is different than above. Again, as discussed above, the timing for multiple bankruptcy filings depends on whether the prior case received a discharge and whether you are seeking a discharge in the future case.
If the prior case that you filed was a Chapter 7 filing in which you received a discharge and you are now looking to file a Chapter 13 case where you are again seeking a discharge, you would be required to wait 4 years from the filing of the prior Chapter 7 to the filing of the new Chapter 13. If your prior case was a Chapter 13, however, and you received a discharge in that Chapter 13 case, and now you are looking to file a Chapter 7 bankruptcy case where you are again seeking a discharge, the required waiting period would be 6 years from the prior case to the filing of the new case. Remember, the dates are based on the actual filing of the cases.
Summary Of Waiting Period Between Filings
*Assuming discharge was entered in the prior case and seeking a discharge in the future case
|
Prior Case - Chapter |
Future Case - Chapter |
Waiting Period - Years |
|
13 |
13 |
2 |
|
7 |
13 |
4 |
|
13 |
7 |
6 |
|
7 |
7 |
8 |
What Is A Discharge?
A discharge in bankruptcy is commonly the biggest goal someone is looking to attain by filing for bankruptcy relief. The discharge is issued by the Federal Bankruptcy Court. By the discharge being issued, the Federal Bankruptcy Court is eliminating your personal obligation on the repayment of certain debts. Even though the discharge eliminates certain debts, there are some debts that survive the discharge and you are still personally obligated to pay those ones back.
Common debs that are generally discharged in a bankruptcy filing are credit card debts, personal loan debts, medical debts, deficiency balances for a car repossession or defaulted lease, or overdrawn bank accounts. Common debts that are generally not discharged are recent tax obligations, student loans, or alimony/child support obligations.
How Does The Automatic Stay Work In A Repeat Filing?
Another big consideration on repeat bankruptcy filings is the initiation---or lack thereof---of the automatic stay. The automatic stay is an injunction on creditors from taking certain actions once it’s initiated, such as collection attempts, lawsuits, home foreclosures, wage garnishments, bank levies, etc. The automatic stay bears it’s name from the fact that it is automatically initiated upon a bankruptcy being filed. However, a repeat filing can actually limit that power.
If a person has had one bankruptcy case active within the 1-year period prior to the filing of the later case, the automatic stay is only valid for 30 days upon the filing of the later case. To extend that automatic stay, the debtor has the ability to make a request to the Judge to extend that automatic stay for a longer period. Moreover, if a person has had two bankruptcy cases active within the 1-year period prior to the filing of the later case, no stay goes into place upon the filing of the later case. The debtor could request from the Judge to initiate the stay.
Why Should I File Chapter 7?
A person filing for Chapter 7 Bankruptcy is advising the court and all creditors that their income isn’t sufficient to cover the monthly debt payments. By doing this, the Court allows you to go through a liquidation process in an attempt to pay some of the creditors back. This is done by the turnover of non-exempts assets to the Trustee assigned to your case and the trustee selling those items for cash payments. Once received, the trustee then disburses those funds to certain creditors. However, in the majority of cases, our office is able to protect all of a person’s assets and no liquidation actually occurs. The case proceeds directly to the discharge phase and generally lasts 3-4 months.
Why Should I File Chapter 13?
A Chapter 13 filing is reserved for those who ultimately do have some disposable income to pay at least a portion of their debt. By going through the Chapter 13, the debtor avoids the liquidation process. Also, Chapter 13 is great for people with higher incomes, mortgage delinquencies, an underwater 2nd deed of trust, priority tax debt, to name a few advantages of filing for Chapter 13. A Chapter 13 is a court-administered repayment plan that lasts up to 5 years. Upon the successful completion of the payment plan, the debtor would then be eligible for a discharge. The discharge, similar as to that in a Chapter 7, eliminates personal obligations on certain debts. Thus, any unpaid dischargeable debt that remains after the completion of the payment plan, is ultimately discharged and eliminated.
What’s Next?
If you have filed for bankruptcy relief in the past and are experiencing a financial hardship after that, please contact Sacramento Multiple Bankruptcy Filing Lawyer Pauldeep Bains by CLICKING HERE or calling 916-800-7690 to schedule your FREE consultation.
