Explore Your Bankruptcy Options
Get the financial relief you are entitled to by filing for bankruptcy protection. Our team represents individuals and small business owners in Chapter 7 and Chapter 13 bankruptcy cases. We can also provide help filing for Chapter 11 reorganization bankruptcy and Chapter 12 bankruptcy for family farmers and fishermen.
We can help you through the petition and filing process. We can help you retain your assets when you choose Chapter 7 bankruptcy. We can even help you restructure financial debt through other bankruptcy filings with complex financial structures or extremely large debt loads. Call Farmer & Morris Law, PLLC, at to speak to a member of our client intake team and learn what happens if you declare bankruptcy today.
Filing Again Without Bankruptcy Discharge
If your bankruptcy did not end with a successful discharge, in most instances you can immediately file a second time. Typically this means your case was dismissed, which puts you right back in the same debt position when you filed.
Reasons for dismissal could include not filing all documents properly and on time, not showing up for a required meeting with the court, not making the required payments or not being truthful with the court. All reflect poor judgment and the wrong approach for a court process, and often anger the court.
If you failed to appear for a required hearing, for example, or ignored a court order never do this the court may order a 180-day delay on filing again.
Another instance when the six-month stay can be placed involves the automatic stay, which the court usually orders on filing and protects you from foreclosure or having your wages garnished while your case proceeds. If, for whatever reason, you agree to dismiss the case when a creditor seeks relief from the stay, the court will see that as filing in bad faith and impose the six-month delay on filing again.
It is a good idea to receive pre-bankruptcy credit counseling to gain some guidance on your options. A nonprofit credit counselor can assess your financial position, and offer sound advice on the best steps to take toward financial recovery. Pre-bankruptcy credit counseling may offer ideas for developing a budget and ways to get back on sound financial ground without bankruptcy.
When Are Multiple Bankruptcy Filings Abusive
The term abusive bankruptcy filing can refer to a Chapter 7 filing that doesn’t meet the means testthe qualification standard that determines a filer’s right to a debt discharge. But it can also describe a case filed by someone who inappropriately uses the bankruptcy process to evade a creditor or buy time in a collection action, such as a foreclosure or lawsuit.
Simply put, the court frowns on debtors who file with no intention of following through with the case. Repeat filers face the consequences for using such tactics, such as a lack of protection from collections or the denial of a discharge.
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Where Bankruptcy Doesnt Help
Bankruptcy does not necessarily erase all financial responsibilities.
It does not discharge the following types of debts and obligations:
- Loans obtained fraudulently
- Debts from personal injury while driving intoxicated
It also does not protect those who co-signed your debts. Your co-signer agreed to pay your loan if you didnt, or couldnt pay. When you declare bankruptcy, your co-signer still may be legally obligated to pay all or part of your loan.
Phase : Discharge Case Closed
Once the bankruptcy trustee has determined that thereâs no property they can sell for the benefit of creditors, theyâll file a Report of No Distribution. This lets everyone know that itâs a no-asset case and can happen anytime after the 341 meeting. No asset cases are typically closed by the court within 1 – 2 weeks or so.
If the trustee hasnât filed a Report of No Distribution, the case will stay open until the trustee signals to the court that theyâve completed their work on the case. How long this process takes can vary greatly, as it depends on what kind of property the trustee is selling and what else is going on in the case.
In some cases, all the trustee is waiting for is the filer’s tax return for the year their bankruptcy case is filed in. If no specific exemption for a tax refund exists, a portion of the refund may be used by the trustee to pay creditors.
Usually, not much else is required from the filer during this process. But, if the trustee asks for additional information or otherwise requests assistance with the sale of property, the filer has a duty to help.
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How Long Does A Chapter 13 Bankruptcy Take
A Chapter 13 bankruptcy involves a repayment plan, so it takes quite a bit longer to complete. Typical Chapter 13 bankruptcy cases last 3 to 5 years. As part of the repayment plan, secured debts, like car loans are paid off. Depending on the type of debt you have, this type of bankruptcy may provide more debt relief than a Chapter 7 filing. Itâs always best to speak to a bankruptcy attorney about a Chapter 13 filing, as there are many moving parts in the Chapter 13 bankruptcy process.
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Your Bankruptcy Has To Be Discharged Before You Can Apply
You cannot apply for any new lines of creditincluding a credit cardwhile your bankruptcy proceedings are in progress without court approval. The amount of time it takes to settle and complete your bankruptcy proceedings will determine when you can apply for a credit card.
A Chapter 7 bankruptcy takes approximately four to six months after the initial filing to be completed and your debts discharged. After that, you can apply for a credit card.
A Chapter 13 bankruptcy, however, can take between three to five years as its a restructuring of your debt that you pay off over time. Only after youve made your last payment will your bankruptcy be discharged. Until then, youll have to wait that entire period of time before applying for a credit card.
When May I File Bankruptcy Again
As a general rule, there is no statutory prohibition against an individual filing another bankruptcy at any time. However, the court could enter such an order . Additionally, 11 U.S.C. §109 provides that you may have to wait 180 days to refile if either: your previous case was dismissed for willful failure to abide by orders of the court , or if your case was dismissed on your request after a creditor filed a motion for relief from the automatic stay. In addition, there are certain prohibitions against receiving another chapter 7 discharge in specific circumstances. See 11 U.S.C. § 727 and .
Subsection prohibits entry of a chapter 7 discharge if you received a discharge in a chapter 7 or 11 case filed within 8 years of the filing of the new case.
Subsection prohibits entry of a chapter 7 discharge if you received a discharge in a chapter 12 or 13 case commenced within 6 years of the chapter 7 filing unless payments under the plan totaled either 100% of allowed unsecured claims or at least 70% of the unsecured claims if the plan was proposed in good faith and was the debtor’s best effort.
Moreover, under 11 U.S.C. § 1328 and , a discharge cannot be entered in a chapter 13 case if the debtor has received a discharge in a chapter 7, 11, or 12 case filed within four years of the chapter 13 filing, or has received a discharge in a chapter 13 case filed within 2 years of the new chapter 13 case.
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If You’ve Filed For Bankruptcy Before You Must Wait A Number Of Years Before Wiping Out Debt In A New Case
Updated By Cara O’Neill, Attorney
If you’ve filed for bankruptcy before, you’ll have to meet certain requirements before you’ll be eligible to receive a debt dischargethe order that wipes out qualifying debt. In this article, you’ll learn how to:
- check whether enough time has elapsed to receive a debt discharge
- determine whether a court order will delay your filing further, and
- know when you’ll need to file a motion for an automatic stay orderthe order that protects you from creditor collections during the bankruptcy case.
How Often Can You File For Bankruptcy
The frequency of applying for bankruptcy depends on which type of bankruptcy youre filing, something known as the 2-4-6-8 rule. Heres a breakdown:
- Filing Chapter 13 after Chapter 13: two years.
- Filing Chapter 13 after Chapter 7: four years.
- Filing Chapter 7 after Chapter 13: six years.
- Filing Chapter 7 after Chapter 7: eight years.
Filing Chapter 13 immediately after Chapter 7 is also referred to as Chapter 20 bankruptcy. You wont receive a discharge when filing Chapter 20, since you arent waiting the full four years between Chapter 7 and Chapter 13, but this type of filing could give you the time you need to pay down debt.
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Timing A Bankruptcy Filing Wisely Can Have A Significant Impact On Your Future
By Stephen Elias, Attorney
COVID-19 Updates: Retirement Accounts Stimulus Funds Online Filings
If you’re worried that you make too much to qualify for bankruptcy, CARES Act provisions ensure that receiving stimulus funds won’t affect your ability to obtain a discharge.
Also, rest assured that you can file safely. Many bankruptcy lawyers will consult with you virtually, and bankruptcy filers now appear at the 341 meeting of creditors by video or telephonically. Check the U.S. Trustee’s 341 meeting status webpage or go to your court’s website for details.
In some situations, it makes sense to hold off on filing for Chapter 7 or Chapter 13 bankruptcy. Sometimes, filing bankruptcy too early can mean losing property you would have otherwise been able to keep, or having to file for Chapter 13 instead of Chapter 7. Other times, you may be able to deal with debt in other ways, and avoid bankruptcy altogether. Read on to learn more about several situations when it might be beneficial to delay bankruptcy.
What If You Didn’t Receive A Discharge In The First Case
In most situations, you can file again and receive a discharge in the second bankruptcy if you didn’t receive one in the first matter. But that’s not always the case. Also, you lose the full benefits of the automatic staythe order that stops creditors from collectingwhen you file multiple bankruptcies in quick succession.
The court dismissed the first case
- Unless the court orders otherwise, you can file again. A 180-day waiting period may apply if you failed to obey a court order or appear in the case, or you voluntarily dismissed the case after a creditor filed a motion for relief from the bankruptcy stay.
The court denied your discharge
- You might be able to file again, but you probably won’t be entitled to a discharge of the debts listed in your first case. This is another unusual circumstance wherein you would be wise to seek the advice of an experienced bankruptcy lawyer.
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What Is Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows you to become debt-free through whats often referred to as a liquidation process. When using this approach, your debt is discharged and your nonexempt property is typically sold with the proceeds distributed to creditors.
Though it varies by state of residency, personal possessions that may be considered nonexempt and thus sold to cover your debts could include your home, pension, car, personal belongings, coin collection and even jewelry. Each state has a set of its own exemptions, and in some cases, youre allowed to choose between your state exemptions and federal bankruptcy exemptions laid out by Congress.
Apr 2 4 6 8 How Long Must I Wait To File Bankruptcy
Youve had to file bankruptcy before, but now you need that emergency relief again. How long do you have to wait between bankruptcy cases? It used to be that the rule was simple you only had to wait 6 years between Chapter 7 cases. Now there is a more complicated rule of 2, 4, 6, 8.
The Two Year Rule
If you received a discharge in a previous Chapter 13 case, you must wait two years before filing another Chapter 13 case or you will not get a discharge in the new case. This is tricky stuff because there is a line of thought and some authority to say that if you do not need a discharge in the new case, but only need time to stretch out your current obligations, then you dont need to worry about this restriction because you are not looking to discharge anything. That would mean you could file another Chapter 13 case immediately after receiving your discharge in the prior case.
The Four Year Rule
If you received a Chapter 7 Discharge in a previous case, then you must wait 4 years before filing a new Chapter 13 case. Again, if you dont need a discharge in the new case, but intend to pay 100% of your creditors over the life of the plan, you dont need to wait 4 years.
The Six Year Rule
The Eight Year Rule
You must wait 8 years between Chapter 7 cases. The previous rule was six years, but has been extended to 8 years in 2005. However, this may be the time to consider a Chapter 13 as there are many hidden benefits to a budget plan than you might think.
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Recent Transfers Of Money Or Property
Giving away property or transferring money and receiving nothing in return within two years prior to filing bankruptcy may be viewed unfavorably, regardless of your intentions when you did so. This is called a fraudulent transfer, and although the name implies an intent to defraud, you do not need the intent. An innocent gift can still be deemed a fraudulent transfer just as well as an act of actual fraud.
Example. Allison has $10,000 in a savings account, which she doesn’t want to lose. She is unemployed and in debt. She wants to file Chapter 7, but she read online that the trustee could take her $10,000 if she can’t exempt it. To hide it from the trustee, she moves all the money to her brother’s bank account and files bankruptcy six months later. This is actual fraud, and the trustee will be able to demand the money from Allison’s brother.
Example. Trish wins $10,000 gambling. She gives $5,000 to her sister as a birthday gift. Almost two years later, Trish is broke and in debt, so she files bankruptcy. Because she filed within two years after giving that money to her sister, the trustee can demand $5,000 from the sister as a fraudulent transfer,
In either of these cases, waiting at least two years from the date of the transfer to file bankruptcy will prevent the trustee from trying to seize the funds.
Saving Your Credit Score Is Only One Reason
An end to collection hell: Nosals study found that once people fell seriously behind on their debt with at least one account 120 days overdue, for example their financial troubles tended to get worse. Balances in collections and the percentage of people with court judgments grew.
By contrast, people who file for bankruptcy benefit from its automatic stay, which halts almost all collection efforts, including lawsuits and wage garnishment. If the underlying debt is erased, the lawsuits and garnishment end.
Freedom from certain debts: Chapter 7 bankruptcy wipes out many kinds of debt, including:
-
Civil judgments .
-
Past-due rent.
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Business debts.
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Some older tax debts.
Some debts, including child support and recent tax debt, cant be erased in bankruptcy. Student loan debt can be, but its very rare. But if your most troublesome debt cant be discharged, erasing other debts could give you the room you need to repay what remains.
Better access to credit: It can be difficult to get credit right after a bankruptcy. But Nosals study shows people who have completed bankruptcy are more likely to be granted new credit lines within 18 months than are people who fell 120 days or more overdue at the same time but didnt file.
Your credit limits after bankruptcy are likely to be low, however, and your access to credit like your credit scores wont recover completely until a Chapter 7 bankruptcy drops off your credit reports after 10 years.
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