Can You File For Bankruptcy A Second Third Or Fourth Time In Illinois
In this article…
In this article, we discuss how often you can file for bankruptcy in Illinois and answer the following questions: How long must you wait between filing the same chapter bankruptcy?, How long must you wait between filing different bankruptcies?, Can you get in trouble for filing bankruptcy too often?, and What can you do if your bankruptcy is dismissed?
In this article, we discuss how often you can file for bankruptcy in Illinois and answer the following questions:
- How Long Must You Wait Between Filing The Same Chapter Bankruptcy?
- How Long Must You Wait Between Filing Different Bankruptcies?
- Can You Get In Trouble For Filing Bankruptcy Too Often?
- What Can You Do If Your Bankruptcy Is Dismissed?
Economic uncertainty continues to loom in the wake of the growing coronavirus pandemic and with it the very real possibility of bankruptcy for many Americans. But what if you filed for bankruptcy in the 2008-09 recession? Or 10, 5, or even 1 year ago? The bankruptcy system allows for multiple filings within a given period of time, but there are strict guidelines. Filing too close together or deliberately trying to game the system can result in your case being dismissed without a chance to file again, fines, or jail time if fraud is involved.
Consider The Pros Of Double Filing
Getting a Chapter 7 discharge and immediately filing for Chapter 13 will give you more time to pay back debts that cannot be discharged, such as child support or spousal support.
Similarly, if you just need more time to pay off your debt, you can consider filing for a second Chapter 13 early. This will not discharge any debt but adds another five years to your bankruptcy payment plan. This will buy you more time instead of having automatic wage garnishment applied to your paychecks.
If you did not receive a discharge during the first filing, you might get one in the second bankruptcy.
If you are considering double filing, you need to work with a bankruptcy lawyer to get it right. There are many nuances that could lead a court to declare that you have filed again in bad faith.
See What Our Experienced Bankruptcy Lawyer Has To Say
Yes, you may file for bankruptcy twice, however, it is important to understand thatbankruptcy anddebt discharge arenot the same. You can file for bankruptcy to get your debts discharged, but not all debts are dischargeable, and some cases do not result in discharge at all. Read on below to learn more.
Hard times are often outside of our control, and if youve struggled financially before, facing the same difficulties can be devastating. Recent years have taken a toll on millions of people, many of whom have pursued bankruptcy in the past and may need to file again. TheLaw Office of Seni Popat, P.C. has over a decade of experience helping answer our clients bankruptcy questions. Our attorney works tirelessly to meet the needs of our clients and provide sound legal counsel backed by extensive experience.
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What Can You Do If You Can’t Find A Licensed Insolvency Trustee
If you are unable to get an LIT to accept your file, or if you cannot afford to hire an LIT, the OSB’s Bankruptcy Assistance Program may be able to help, provided that you:
- have contacted at least two LITs and tried to obtain their services
- are not, and have not recently been, involved in commercial activities
- are not required to make surplus income payments and
- are not in jail
A creditor is harassing me daily. What should I do?
Although the regulations differ slightly across Canada, there are limits on what creditors and collection agencies are allowed to do. For example, they cannot make telephone calls of such a nature or frequency that they amount to harassment of you or your family. In addition, there are certain times when they are not allowed to call.
Tips for dealing with collection agencies If you feel you are being harassed, contact either an LIT or a qualified and experienced credit counsellor. They can help you by serving as an intermediary between you and your creditor.
and we will send you some information and a list of LITs who participate in the program.
What Can You Do If Your Bankruptcy Is Dismissed
If the court finds that youâve been deliberately skirting the system, such as multiple filings in order to delay creditors, the bankruptcy court will likely block you from filing another bankruptcy for a specified period of time, cut your automatic stay short, or seek legal action in more serious cases. If the court dismisses your case in this way it is referred to as a dismissal âwith prejudice.â
You donât have a lot of options if youâve been locked out of the bankruptcy system. If your case was dismissed without prejudice you can refile for bankruptcy, or appeal your original bankruptcy dismissal. If your Chapter 7 bankruptcy was dismissed on the grounds that you donât qualify you can still file for Chapter 13 bankruptcy. The most important first step when considering bankruptcy is seeking the guidance of an experienced bankruptcy attorney. Give us a call at 630-324-6666 and weâll be happy to answer all your questions.
About the author
Kevin OâFlaherty is a graduate of the University of Iowa and Chicago-Kent College of Law. He has experience in litigation, estate planning, bankruptcy, real estate, and comprehensive business representation.
What to Expect From a Consultation
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Benefits Of Chapter 13 Bankruptcy
Chapter 13 does provide some important benefits to debtors. People can reduce the interest rates, the amount they owe on secured loans, plan for lower monthly payments and extend the time they have to pay down mortgages, tax debts and other significant burdens. Some unsecured debts may be reduced to zero, and a Chapter 13 bankruptcy provides provisions to get out of other costly contracts, such as an unaffordable lease.
After a Chapter 13 bankruptcy, on the other hand, people must wait 6 years to file for Chapter 7. If they want to file for Chapter 13 again, there is only a two-year wait.
Chapter 13 To Chapter 7 Bankruptcy
To file Chapter 7 after a Chapter 13 bankruptcy, you are required to wait six years at minimum. However, it is important to note that there are exceptions to this. You do not have to wait the six years in between filings if:
- In the initial Chapter 13 filing, you paid off your debts
- You paid 70 percent of any unsecured debts, and your plan was in good faith
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Are The Majority Of Your Debts Unsecured Or Secured
If a debtors debts are mostly secured or even nondischargeable, then filing bankruptcy the second time around might not be beneficial. For example, if the debtor had $40,000 in secured, priority, nondischargeable debt and only $5,000 in unsecured debt, bankruptcy might not offer the benefits they need. On the other hand if only $5,000 are secured, priority, nondischargeable debts and $40,000 are unsecured debts then filing a second bankruptcy could offer huge benefits to the debtor. A bankruptcy attorney can help a debtor determine which debts can be discharged in bankruptcy.
Second Time Bankruptcy What Rules Apply
In Canada, about 15% of people that have filed for bankruptcy end up declaring bankruptcy a second time. Since approximately 60,000 Canadians will be declaring bankruptcy this year that means 9,000 of them likely have done so before.
The number of people filing second bankruptcies is large enough that in 2009 the federal government brought into effect new to deal with repeat filers.
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Chapter 7 To Chapter 13
If you filed Chapter 7 the first time and are now looking to file Chapter 13, you need to wait 4 years from your original Chapter 7 filing date to file Chapter 13. Keep in mind, however, that the time limits are if you are hoping to receive a second discharge. You might decide to file a Chapter 13 after a previous Chapter 7 without the goal of discharge if you are now behind on a secured debt that you want to keep and need the plan to catch up on payments. This filing sequence is sometimes referred to as âChapter 20.â
Is It Possible To File For Bankruptcy More Than Once
Yes, it is possible to file for bankruptcy more than once. There are, in fact, no limits to the number of times an individual can file for bankruptcy. There are, however, limits on how often an individual can file if they want to discharge their debts.
There are also time limits for filing bankruptcy, depending on the type. If an individual previously filed for Chapter 7 bankruptcy, they can file for Chapter 7 bankruptcy again after 8 years. They can file for Chapter 13 bankruptcy beginning 4 years after the date they filed their Chapter 7 bankruptcy.
If an individual previously filed for Chapter 13 bankruptcy, they can file for Chapter 13 bankruptcy again after two years. They can file for Chapter 7 bankruptcy beginning 6 years after the date they filed the Chapter 13 case.
There is, however, an exception to this rule. An individual can file for Chapter 7 bankruptcy right away if they:
- Paid 100% of the debts they owed to unsecured creditors in their Chapter 13 case and
- Paid at least 70% of the claims in the Chapter 13 case. The individual must have proposed the payment plan in good faith and put forth their best effort to repay their creditors.
It is important to be aware that, in some cases, multiple bankruptcy filings may be considered abusive. An abusive bankruptcy may be a case that is filed by an individual who inappropriately uses the bankruptcy process to evade a creditor or to buy time in a collection action, including foreclosures and lawsuits.
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How To Get A Discharge In The First Place
Most debt can be discharged in a personal bankruptcy case, with the exception of student loans and tax debt. So long as you qualify for the bankruptcy chapter under which you file, most consumer bankruptcies filed with the help of an attorney are discharged and youll pay pennies on the dollar for your debt.
Your bankruptcy discharge can be denied, however, if you do any of the following:
1. Attempt to defraud: If you transfer, move, or conceal property, youre in big trouble. Make sure to talk about all transfers before your bankruptcy filing with your bankruptcy attorney.
2. Conceal or destroy information: This also goes along with failing to keep information on your financial situation in the first place. Keep all records on your finances in a safe and organized place.
3. Lie: A no-brainer, but, any sort of false statement made under penalty of perjury may not only land you back in court, but in jail.
4. Lose assets: This is when you cant explain any sort of loss or deficiency in assets.
5. Refuse to comply with a court order: Similar to lying, disobeying the court is a bad idea.
6. Fail to take an instructional course: When you file for bankruptcy, you must take two instructional courses in finances. One is about credit counseling, while the other is about financial management. These courses are mandatory under the federal law that governs bankruptcy.
The Way That The Debt Is Discharged Makes A Difference
The main reason why the order matters is related to how debts are discharged under Chapters 7 and 13. Chapter 7, also known asliquidation, relieves debt by selling nonexempt assets to settle creditor claims. This type of bankruptcy is often a quicker debt relief solution. Chapter 13 however gives filers the opportunity to pay off debt throughreorganization. A Chapter 13 payment plan takes around three or five years to complete, which explains why the waiting period for a second filing is longer.
It is also important to understand that bankruptcy can help you recover financially without total debt discharge. Chapter 13 allows you to spread out your payments over time instead of wiping them away entirely. If you can pay off your debt with an extension, Chapter 13 may be an option for you.
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Evaluating A Second Bankruptcy Filing
Having gone through bankruptcy previously, you already understand that your financial situation is unique. As before, when deciding whether bankruptcy will be beneficial, youll want to consider:
- whether you have the type of debt thats dischargeable
- the amount of property you can keep , and
- the differences between Chapter 7 and Chapter 13 bankruptcy and which would be the best fit for you.
But before you go through the analysis, you might want to consider significant timing issuesjust to be sure that your second filing will go through as smoothly as the first.
You can always file another bankruptcy case. However, if youd like to receive a second discharge of your debts, you must wait until a fixed period elapses.
Filing Chapter 7 After Chapter 13
The waiting period is six years if you want to file Chapter 13 after filing Chapter 7. You gain a benefit if you paid your unsecured creditors everything you owed in the initial Chapter 13 bankruptcy. If that is the case, the waiting period can be waived. It would be wise to consult an attorney if considering this option.
How Long Do You Need To Wait Between Bankruptcy Filings
How long you will need to wait will depend on the type of bankruptcy that you are interested in filing and what type of bankruptcy you filed lastas there are different restrictions for each.
- SuccessiveChapter 7 Cases:You must wait at least 8 years
- SuccessiveChapter 13 Cases:You must wait at least 2 years
- Chapter 7, then Chapter 13: You must wait at least 6 years
- Chapter 13, then Chapter 7: You must wait at least 4 years
Do Bankruptcies Affect Second Mortgages
Second mortgages and home equity lines of credit are also impacted by bankruptcies. If you have a second mortgage or HELOC, youre not responsible for it under a Chapter 7 bankruptcy, but youre required to keep paying on it if you want to keep the house without a problem.
Things become a little more complex with a Chapter 13 bankruptcy. If you can prove that your existing equity isnt enough to cover what you owe on a second mortgage or HELOC, you can present that evidence in bankruptcy court. If a judge agrees, the junior lien taken out after your first mortgage may be stripped off.
One thing to note is that a lender may fight this, so to give yourself the best chance of success, you may want to have an appraisal done before you file for bankruptcy.
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What Are My Options
In some cases, a consumer proposal may be a better option than a second bankruptcy. One feature of most consumer proposals is that your monthly payment will remain the same, and will not be affected by any changes in your income during the length of the proposal.
Before deciding to file for a second bankruptcy in Canada, you should fully understand all of its implications, including prolonged bankruptcy discharge. We recommend that you contact a Licensed Insolvency Trustee today and arrange for a no-charge initial consultation.
Bankruptcy Normally Lasts For 3 Years And 1 Day From The Day We Accept Your Bankruptcy Form
Your bankruptcy period starts from the day we accept your bankruptcy application. If a creditor makes you bankrupt, the bankruptcy period starts from the date you file a statement of affairs that we accept. In some cases, your trustee can lodge an objection to extend the bankruptcy for up to eight years.
Debtcom Howard Dvorkin Responds
Your story is complicated, Jo, but its not unusual. For two decades, Ive seen Americans sink slowly into debt as if it were quicksand. They grab at anything they think will save them. That does slow down the inevitable but it doesnt stop it.
I can give you some information that will make it easier to understand all the factors at play here. However, I recommend that you get in touch with someone that can help you understand how all of this applies in your specific financial situation.
#1: The credit report notation for your first bankruptcy should have fallen off years ago.
If you filed for bankruptcy in 2006, then the latest that penalty should have remained on your report is 2016. Even if you filed for Chapter 7, the public record notation should only remain for 10 years.
So, at a minimum, you should contact the credit bureaus to dispute why the item is still showing up on your reports. I recommend going to annualcreditreport.com to check your reports with all three bureaus .
If you dont know how to make a dispute, Debt.com offers a free guide to help you along.
#2: Enough time has passed that you can legally file bankruptcy again
The maximum amount of time that needs to pass between filings is 8 years. That means youre well past the point of time required between your first and second discharge. You should be able to file for Chapter 7 or Chapter 13 without the time limit between your filings being an issue.
The bottom line