How Soon Can You File For Chapter 13 After Chapter 7 Bankruptcy
In order to get debts discharged through Chapter 13, you must wait four years after filing a Chapter 7 bankruptcy.
You can file for Chapter 13 before four years if no debts were discharged in the Chapter 7 filing, but if you had debts discharged in Chapter 7 and want to have debts discharged in Chapter 13, you must wait four years.
Review Your Credit Reports
Monitoring your credit report is a good practice because it can help you catch and fix credit reporting errors. After going through bankruptcy, you should review your credit reports from all three credit bureausExperian, Equifax and Transunion. Due to Covid-19, you can view your credit reports for free weekly through April 20, 2022 by visiting AnnualCreditReport.com.
While reviewing your reports, check to see if all accounts that were discharged after completing bankruptcy are listed on your account with a zero balance and indicate that theyve been discharged because of it. Also, make sure that each account listed belongs to you and shows the correct payment status and open and closed dates.
If you spot an error while reviewing your credit reports, dispute it with each credit bureau that includes it by sending a dispute letter by mail, filing an online dispute or contacting the reporting agency by phone.
How Long Does Chapter 7 Bankruptcy Last For Florida Residents
Please note, you must be a resident of Florida for 90 days before filing for bankruptcy in the state, and you will need to avoid charging your credit cards or taking out any loans 90 days before filing. Any loans or purchases made on credit in that time will not receive the benefit of the automatic stay. You must complete credit counseling before filing, as well. See? Bankruptcy, even simple one scan take some planning.
They should also take a lawyer.
During those three to six months, youre going to have a lot on your plate from Statement of Intention to your Creditors Meeting. Your attorney, if your wisely retain one, and the US trustee will handle it. Why your attorney? The judge, the trustee, the clerks of the court, nine of them are not allowed to advise you because they are not lawyers. Your creditors will have attorneys to protect and speak for their interests, and so should you.
After discharge, the situation is not so bleak. Im asked pretty often how long a Chapter 7 bankruptcy lasts on a credit report the answer is about ten years. However, the more time has passed since the bankruptcy, the less impact it has on your credit, and thus increases your ability to secure loans, credit cards, rent an apartment or obtain a mortgage. You may be a better candidate for credit since you cant file for bankruptcy again for eight years. You literally have nowhere to go but up from there.
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Other Factors That Can Impact Your Bankruptcy Timeframe
Finally, wed like to point out that there are a few additional things that could affect how long your bankruptcy takes. Most of them are beyond your and your bankruptcy attorneys control, so you may have to adjust your expectations about the timeline.
One of these factors is sudden job loss and an inability to secure new employment quickly. Your bankruptcy plan was based on a certain level of income, so job loss makes this very difficult to maintain.
Similarly, an unexpected illness or injury could make you unable to work. Now youre facing a bankruptcy repayment plan thats no longer realistic for you.
If this happens to you, talk to your bankruptcy attorney about a Chapter 13 hardship discharge. There are strict requirements to qualify, but if you can secure this type of discharge it may ease your stress and financial burden significantly.
Theres also a possibility that a Chapter 13 bankruptcy may end early due to a windfall of money you couldnt possibly have foreseen. Maybe during your bankruptcy plan, a distant relative dies and leaves you a large sum of money, which you then use to resolve your bankruptcy.
Georgia Bankruptcy Lawyers And Debt Discharge
Chapter 13 does more than give you time to catch up on mortgage and other secured payments. Bankruptcy also discharges many unsecured debts, such as credit cards and medical bills. Imagine what your family can do with the hundreds of dollars a month discharge could save you.
Some unsecured debts are only dischargeable in some situations. Thats where a Georgia bankruptcy lawyer makes a big difference.
Student loans are a good example. These unsecured debts are dischargeable if the borrower has an undue hardship. The Eleventh Circuit, which includes Georgia, narrowly defines undue hardship. As a result, many student loan debtors do not even ask for relief.
If a Georgia bankruptcy lawyer files a motion to discharge the debt, the judge usually refers the dispute to mediation. During mediation, both sides have a duty to negotiate in good faith. Sorry, Charlie, you dont qualify is not a good faith position. The bank must compromise to reach an agreement. Therefore, most student loan debtors receive at least a partial discharge, even if they only marginally qualify for one.
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The Chapter 13 Process
First, you should find a bankruptcy lawyer who can provide you with a free evaluation and estimate to file.
The cost to file Chapter 13 bankruptcy consists of filing fees and fees charged by a bankruptcy attorney. Petitioners need to pay a $313 filing fee to the bankruptcy court. They also need to provide:
- A list of creditors and the amount of their claims
- Disclosure of the amount and sources of the debtors income
- A list of the debtors property, as well as an accounting of all contracts and leases in the debtors name
- A breakdown of the debtors monthly living expenses
- Tax information, including a copy of the debtors most recent federal tax return and a statement of any unpaid taxes.
Chapter 13 petitioners must stipulate that they havent had a bankruptcy petition dismissed in the 180 days before filing due to their unwillingness to appear in court. Also, anyone seeking bankruptcy protection, must undergo from an approved agency within 180 days of filing a petition.
Shortly after filing bankruptcy, the debtor also must propose a repayment plan. A bankruptcy judge or administrator will hold a hearing to determine whether the plan meets the requirements of the bankruptcy code and is fair. Creditors may raise objections to the plan, but the court has the final say.
Debtors can arrange to make up delinquent payments over time, but under Chapter 13 rules, all new mortgage payments from the time of filing must be made on time.
Am I Able To Choose The Length Of The Plan
In some circumstances you can choose the length of your Chapter 13 plan. This is all dependant on your Stateâs Median Income.
State Median Income.State Median income refers to the average monthly income in your state. If your CMI is less than the State Median Income then you are able to choose a three year plan over a five year plan. The benefits here are that you case will end sooner and you may pay less overall, especially to your unsecured creditors.
If your CMI is more than the State Median Income then you will have to file for a five year plan and will not have the option to choose three years instead.
When choosing five years over three makes sense. Just like there are circumstances that would prompt you to file for a Chapter 13 over a Chapter 7, there are reasons why you might choose to file a five year plan over a three year plan even if you can go shorter. The main reason for opting to go longer is to reduce your monthly payment over the plan.
When you are repaying through your plan it might not be affordable to do so in three years. You might need to stretch it out over five years to be able to afford the payment.
A Chapter 13 bankruptcy is designed to be a remedy to help you catch up. There is no point in entering into a Chapter 13 case plan payment that you will not be able to afford.
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Why File Chapter 13 Instead Of Chapter 7
Chapter 13 may provide you with bankruptcy protection even if you make too much money to qualify for a Chapter 7 case or if you received a discharge in a prior Chapter 7 case. You get the length of the plan to pay back past due amounts owed on houses, cars, and other loans that have collateral. Chapter 13 may allow you to set new terms for the payment of a car loan that is older than 2.5 years, too.
Chapter 13 allows you to pay past-due income taxes and domestic support obligations like child support and alimony over the three- to five-year payment plan. This form of bankruptcy protects any co-signers you have, and it could help you reduce high student loan payments.
Furthermore, Chapter 13 allows you to protect property that you’d have to give up in a Chapter 7 case. And, there’s a chance you can roll your bankruptcy attorney’s fees into your repayment plan.
Chapter 13 can be a lifesaver for individuals who are committed to making it a success. Chapter 13 cases, though, are not easy to live with. In fact, the American Bankruptcy Institute noted in a 2017 study that only 38.6% of debtors completed their Chapter 13 plan. But, knowing what to expect is one of the most important factors in setting yourself up for success.
Who Should File Chapter 13 Bankruptcy
Many people think of bankruptcy court as the final stop on a path to financial ruin, the only option left when repaying debts seems impossible. But theres hope even in bankruptcy, and Chapter 13 of the federal bankruptcy code offers the closest thing to a soft landing.
Sometimes called the Wage Earners Bankruptcy, Chapter 13 allows those with enough income to repay all or part of their debts as an alternative to liquidation. Its bankruptcy for those whose biggest problem is dealing with creditors demands for immediate payment, not lack of income.
One of its most attractive features is the chance to keep your home after Chapter 13 bankruptcy as long as you can pay the mortgage and any amount required by your Chapter 13 repayment plan..
Under Chapter 13, people have three to five years to resolve their debts while applying all their disposable income to debt reduction. The option allows applicants to eliminate unsecured debts while catching up on missed mortgage payments. Short-circuiting home foreclosure is one of the options most attractive features. Though keeping your home can be a major relief, youre required to spend years living under the supervision of a court-appointed trustee who will collect and distribute your payments.
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What If My Circumstances Change During My Chapter 13 Bankruptcy
Three to five years is a long period of time and it is not uncommon to have a change in circumstances that will impact your bankruptcy. The plan is based on your ability to make the payments, so any change to your income, good or bad, could have an impact. This could involve losing your job, getting a raise or a new job, getting a divorce, or adding more children into your home.
If you do have a change in circumstances that impacts your ability to make payments, you can request a change in your plan by filing for a remedy which can include a Chapter 13 Plan Modification, a Motion to Excuse missed payments or other possible motions. In this scenario, it may be helpful to consult and attorney or Legal Aid to find out your options — as failing to make a payment on your plan could put your entire case at risk of being dismissed.
Quickly Determining Chapter 13 Repayment Plan Length
Chapter 13 bankruptcy allows debtors to reorganize their debts, catch up on missed mortgage or car loan payments, and pay off other obligations through a repayment plan. Here’s an easy way to determine the length of your plan: If you’d qualify to file for Chapter 7 bankruptcy but choose to file for Chapter 13, your plan length will be three yearsalthough you can pay into a five-year plan if you need more time. If you don’t qualify for Chapter 7, your repayment plan commitment period will be five years.
If you’re not sure about the differences between the two chapters, start by learning how to choose between Chapter 7 and 13.
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Can You Remove Bankruptcy From Your Credit Report
In most cases, no: You cannot remove a bankruptcy from your credit report. Remember, it will be removed automatically after seven or 10 years, depending on the type of bankruptcy you filed.
In the rare case that the bankruptcy was reported in error, you can get it removed. Its fast and easy to dispute your information with TransUnion. If you see a bankruptcy on your credit report that you didnt file, heres how to dispute your credit report.
Disadvantages Of Filing For Chapter 13 Bankruptcy
There are a few drawbacks to consider when deciding whether to file for Chapter 13 bankruptcy. Be aware that it can take up 5 five years for you to repay your debts under a Chapter 13 plan, and debts must be paid out of your disposable income. Disposable income is any income you have left over after spending on necessities like food, shelter, and medical care. In other words, all your extra cash will thus be tied up during the entire repayment plan.
Any bankruptcy filing could also negatively impact your credit for some time. A Chapter 13 bankruptcy can remain on your credit report for up to 10 years, and you will lose all your credit cards. Bankruptcy also makes it nearly impossible to get a mortgage if you don’t already have one.
Further, note that you will not be able to file for Chapter 7 bankruptcy if you went through bankruptcy proceedings under Chapter 13 within the last 6 years declaring bankruptcy under Chapter 13 will make it harder to declare under Chapter 7 later. Be aware that you cannot file for Chapter 13 bankruptcy if a previous Chapter 7 or Chapter 13 case was dismissed within the past 180 days because:
- you violated a court order, or
- you requested the dismissal after a creditor asked for relief from the automatic stay.
Note that if you obtained a Chapter 13 discharge in good faith after paying at least 70% of your unsecured debts, the 6-year ban on Chapter 7 bankruptcy doesnt apply.
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Phase : Filing Date 341 Meeting Of Creditors
The 341 meeting is scheduled about 30 days after the petition date. The meeting itself typically takes less than 10 minutes to complete.
While waiting for your 341 meeting, youâll likely hear from your trustee. Theyâll let you know what documents they need from you to prepare for your 341 meeting. As long as youâve kept the documents you used when preparing your bankruptcy forms, doing this shouldnât take very long.
Most filers also get the financial management course out of the way while they wait for their 341 meeting. Bankruptcy law requires every person filing bankruptcy to complete this education course. It tends to be a little longer than the first course, usually around 2 hours.
Become An Authorized User On A Credit Card
If you dont want to take out a secured credit card, you can ask a family member or friend who has good credit to add you as an on one of their credit cards. You may see an increase in your credit score if the issuer reports the cards positive payment history to the three main credit bureaus. However, your score could take a dip if the primary cardholder makes a late payment or maxes out their credit limit.
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How Long Does Chapter 7 Bankruptcy Last
In a Chapter 7 liquidation as opposed to a reorganizing your debts that with either a Chapter 11 Bankruptcy or a Chapter 13 Bankruptcy, your assets which are deemed not exempt pursuant to various Florida statutes and the federal bankruptcy code are liquidated by the appointed Chapter 7 trustee, and the proceeds from the sale are disbursed to your creditors. A Chapter 7 Bankruptcy can be filed for individuals or businesses, but for individuals to qualify, they must pass the means test. If your income exceeds the medium income allowable for your household and your Chapter 7 may be considered abuse under bankruptcy section 707, you may convert your case to a case under Chapter 11 or Chapter 13.
A Chapter 7 bankruptcy filing is relatively quick instead of the more complex Chapter 11 bankruptcy or Chapter 13 bankruptcy, and your debts are commonly wiped out in three to six months. The timeline to acquire your discharge hinges on a mixture of factors, such as how congested the bankruptcy courts are. However, if creditors oppose your bankruptcy filing or possess non-exempt assets, your discharge may take longer to receive.
What An Automatic Stay Cant Prevent
An automatic stay has limitations as well as benefits. While it helps on some fronts, it doesnt provide protection from all debts or legal actions.
- Criminal proceedings: If you were charged with a crime and a penalty is part of the charge, an automatic stay will not help you avoid paying the penalty. Dont bother arguing this one. The Supreme Court ruled bankruptcy laws should not be used to shield creditors from criminal proceedings.
- Support actions: Likewise, dont think about stopping child support payments upon filing for bankruptcy. The automatic stay wont stop child support from accruing or delay family law proceedings. Child support debt is among the first debts to get paid.
- Pension loans: While an automatic stay can protect a debtor against wage garnishment, employers can continue to deduct pension loan payments through the garnishment. With job-related pensions and IRAs, money can be withheld from your income to pay loans.
- Multiple filings: The past is not really past. Multiple bankruptcy filings in a years time might smell like a manipulation of the bankruptcy system. Youll have to prove your repeat filing is legitimate.
If you had a bankruptcy filing the previous year, the stay will automatically terminate after 30 days unless you, the trustee, the U.S. Trustee or a creditor asks for the stay to continue.
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