What If You Need To File Again
Since the goal of filing for bankruptcy is to attain a fresh financial start, the question isnt how many times can you file bankruptcy? instead, how often will your filing receive a successful discharge of debts? You can file bankruptcy as many times you need, but the timing between discharges matters. The Bankruptcy Abuse Prevention and Consumer Protection Act is a law that prevents consumers from abusing the bankruptcy process by ensuring people were not merely using it to get out of debt quickly. Before the BAPCA, one could file for Chapter 7 bankruptcy and immediately liquidate their assets regardless of income level.
The BACPA now states that individuals can only file a Chapter 7 if they fall within a certain income bracket depending on the state they file in or pass a means test that shows they cannot afford a payment plan for their debts. If the individual is unable to pass either of the above requirements, they must file for Chapter 13 bankruptcy.
This law limits how often one can file for bankruptcy by stipulating the amount of time between filings. While you are able to file for bankruptcy as many times as you need to, you will not receive a second discharge unless the appropriate amount of time has passed. The law does not limit the order in which chapters are filed, making it possible to file Chapter 7 bankruptcy followed by Chapter 13 or vice versa as the situation permits.
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Personal Vs Business Bankruptcy
Theres an important distinction to be made. Trump has never actually filed for personal bankruptcy. Instead, four of his businesses have filed for Chapter 11 bankruptcy.
Taj Mahal was the first in 1991 and was followed by the Trump Plaza Hotel the next year. After over 10 years of general stability, the Trump Hotels and Casino Resorts filed in 2004 and the Trump Entertainment Resorts in 2009.
Trump claims his personal finances were only involved in the Taj Mahal Chapter 11 bankruptcy filing. This is the reason Trump has been able to come out on top after multiple filings. Not involving his personal finances in the corporations operations protected his own bank account from total ruin.
Trump understands the difference between business and personal bankruptcies quite well. If you run your own business, its important that you do too.
Filed by a business or an individual in the case that business-related debts cannot be paid. Corporations and partnerships, in which the entities are separate from the owners, may file for Chapter 7 or Chapter 11 bankruptcy.
Sole proprietorships, in which the owner is legally responsible for business-related debts, may file for Chapter 7, Chapter 11 or Chapter 13 bankruptcy.
Filed by an individual in the case that personal debts cannot be paid. Individuals typically file for Chapter 7 or Chapter 13 bankruptcy.
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Time Limits Apply To Discharges Not Bankruptcy Filings
Bankruptcy law doesnt set a minimum period that you must wait before filing for bankruptcy a second time. However, theres a catch. If you file too soon after wiping out debt in a previous case, you wont be eligible for another debt discharge .
Although there are times that it makes sense to file for bankruptcy even though you wont receive a discharge, these situations are rare . Because a bankruptcy filed too soon will end up being a waste of time and money in most cases, its essential to know how to time your bankruptcy filing.
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A Bankruptcy Court Isn’t Like Other Courtsyou Might Never Set Foot In A Courtroom Learn Why
By Carron Nicks
It’s not surprising that many people worry that they might be treated harshly by a bankruptcy judge if they file for bankruptcy. Not only can admitting to financial issues be embarrassing, but most people are intimidated by going to court. If this is true for you, you might be comforted to know the chances are you’ll never have to testify in a courtroom before a bankruptcy judge. If you do, you’ll find the judge, court personnel, and most likely even your creditors to be professional and polite.
Donald Trump Is The King Of Bankruptcy Filings Destroying Many Lives Along The Way
Donald Trump spewing his birther-crap again just for attention, is seriously defensive when asked about his bankruptcies over the past two decades. Trumps Taj Mahal Hotel was built by Trump selling bonds to raise over 800 million dollars, then declaring bankruptcy which turned the bonds into junk-bonds. For all of Trumps hyperboles about his riches, if you and I did what he has done we would be imprisoned for life years ago!
For legendary tycoons, Donald Trump tops the list, but how many times has Donald Trump filed for bankruptcy? The 90s recession wasnt picky about who it affected. Donald Trump felt the pinch as well. His decision to use high interest bonds to finance the assembly of the Taj Mahal casino caused life to get very stressful for the tycoon.
In 1991, unable to pay a $3.5 billion loan, he declared business bankruptcy. He also came close to filing personal ruin. At the time, his personal debt was estimated to be around $900 million. Due to the bankruptcy, banks and bondholders lost millions. They came to a compromise with Donald Trump. The banks gave him lower interest rates and a longer time frame to repay the debt and Donald Trump gave the investors half the ownership of the Taj Mahal. In mere months the casino was back in business.
Posted on: Apr. 23, 2010
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Forms Of Bankruptcy To Consider
If youre facing large amounts of debt, have ruled out a workout or are not eligible for a workout, you will want to consider bankruptcy. Youll also want to have an understanding of the types of bankruptcy available to you.
Most people have heard of Chapter 7, Chapter 13, and Chapter 11 bankruptcy. Since Chapter 11 bankruptcy is usually for businesses, well focus on Chapter 7 and Chapter 13. Please do not hesitate to contact us though, if you are interested in learning more about Chapter 11 bankruptcy, which is also known as reorganization bankruptcy.
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Pros Of Filing Bankruptcy
One immediate advantage that helps debtors when they file for bankruptcy is the automatic stay. This motion alerts creditors that they must stop their efforts to collect money from debtors. This stay is what stops creditors from calling you! Under an automatic stay, creditors are not allowed to call, send collection letters, file lawsuits, garnish wages, or seize assets except for in specific situations such as the collection of alimony and child support payments.
The biggest pro of filing bankruptcy is that a court discharges your debts. That means that certain debts will not need to be repaid. This, of course, is dependent on the form of bankruptcy you file: either chapter 7 or chapter 13.
History Of The Bankruptcy Courts
- 2005: Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 passed. It revised how individuals file for personal bankruptcy.
- 1994: Bankruptcy Reform Act of 1994 created to improve efficiency in bankruptcy proceedings.
- 1984: Bankruptcy Amendment Act of 1984 reduced authority of bankruptcy courts, following a 1983 ruling by the Supreme Court of the United States. This act changed the method of appointment and clarified the position of bankruptcy judges.
- 1980: Bankruptcy Tax Act of 1980 created to cover tax-related issues left out of 1978 Act.
- 1978: Bankruptcy Reform Act of 1978 created. This law still serves as the governing legislation for the U.S. bankruptcy courts.
- 1973: Position of bankruptcy judge was created.
- 1946: Referees receive fixed salary.
- 1938: The Chandler Act of 1938 was created in response to Great Depression. It also enhanced role of referees.
- 1898: Bankruptcy Act of 1898 created. It established “referees” to act as administrator in bankruptcy cases.
- 1878: Law repealed by Congress.
- 1867: Third bankruptcy law created in aftermath of Civil War. This was the first law to include protection for corporations.
- 1843: Law repealed by Congress.
- 1841: Second bankruptcy law created in response to the Panic of 1837.
- 1803: Law repealed by Congress.
- 1800: First bankruptcy law created as a result of land speculation.
Procedures In Bankruptcy Court
Bankruptcy itself can occur when a person or business cannot repay their debts. Once the debtor files the petition, the following proceedings are decided by the bankruptcy courts: The court measures and evaluates the debtor’s situation, and then returns a process and plan for how the debtors assets may be used to repay a portion of outstanding debt.
The decision is overseen by a bankruptcy judge, and that judge is able to decide whether or not the debtor should be discharged of their debts. This means that the debtor will no longer be responsible or personally liable for the debts associated with the filing. Some debts, however, are ineligible for discharge, including tax claims, child support, alimony payments, and personal injury debts.
An individual also cannot be discharged from any debt on any secured property, and any creditor can still enforce a lien on a debtors property.
Bankruptcy courts make extensive use of video- and audio-conferencing facilities because it is impossible to assemble creditors from different parts of the country into a single room at the same time.
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Meeting With An Attorney
Most bankruptcy cases proceed straightforwardly without the need for court appearances other than the meeting of creditors. But that’s not always what happens. A simple way to learn what to expect in your bankruptcy is to consult with a knowledgeable bankruptcy lawyer. After reviewing your case, the lawyer will likely be able to predict the course of your matter with a high degree of accuracy.
Filing Under Different Chapters: The Order Matters
Here are the waiting periods when a second bankruptcy case is a different chapter than the one you received your first discharge in.
Chapter 13 before Chapter 7
- If the court granted your first discharge under Chapter 13 bankruptcy, youd need to wait six years before filing for a Chapter 7 discharge. You wont have to wait that long however, if you paid unsecured creditors in full in the Chapter 13 case, or if you paid at least 70% of the claims, the plan was proposed in good faith and was represented your best effort.
Chapter 7 before Chapter 13
- If the court granted your first discharge under Chapter 7, youd have to wait four years from the Chapter 7 filing date before filing a Chapter 13 case.
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Filing Under Chapter 11
Businesses that face financial difficulties but want to reorganize and recover often file for Chapter 11 of the Bankruptcy Code. Under this type, you enter into a debt repayment plan that the court supervises. You also create a plan to remain profitable and cut costs, so you can continue your business while paying your debt.
How often can you file chapter 11?
The bankruptcy court allows you to file Chapter 11 as often as you need. Theres no waiting period to be eligible for another discharge. You can file for another Chapter 11 bankruptcy anytime if your first filing was Chapter 11. If you previously filed Chapter 7 or Chapter 13 bankruptcy, theres also no waiting period to be eligible for Chapter 11.
Paying A Chapter 13 Attorney
Thankfully, most lawyers will not require that you pay everything up front for Chapter 13 bankruptcy. In most instances, the attorney will require that a portion of fees is paid before filing the case. The balance can be included in the Chapter 13 payment plan. The cost of filing for this type of bankruptcy will depend on the lawyer and the law firm representing you.
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The Next Federal Bankruptcy Law
After the financial panic of 1837, Congress passed another bankruptcy law, called the Bankruptcy Act of 1841. For the first time, this bankruptcy law permitted debtors to file their own voluntary bankruptcies without a creditor to initiate it. This was a revolution in insolvency law. In fact, a debtor could file for bankruptcy and receive a discharge of debt. In addition, any individual could be a debtor, not just a merchant as under the 1800 law. The power to grant the discharge and judge other matters relating to bankruptcy rested with the United States District Courts.
Unfortunately, however, creditors viewed the 1841 law as providing few payments to creditors and discharging too much debt for too many debtors. Accordingly, the 1841 law was repealed in 1843.
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Is There A Decline In Chapter 7 Bankruptcy
Chapter 7 consumer bankruptcy filings have declined since 2010, and Chapter 13 filings have leveled off in the last few years . The percentage of total filings that Chapter 7 filings accounted for has declined since 2010, whereas the percentage of total filings under Chapter 13 filings has increased .
How Many Times Can You File Bankruptcy
So, youve filed for bankruptcy before and thought that would be a good fresh start. Unfortunately, things dont always go your way despite giving your best efforts. Now that youre facing another financial hardship, you might be wondering, how often can you file for bankruptcy?
The short answer is as many times as you need. Theres no limit to the number of bankruptcy filings you can do, but there are waiting periods before you can receive another debt discharge. Time limits are necessary to prevent the abuse of the Bankruptcy Code. However, if your debt was not discharged in a previous filing, you can file for another bankruptcy case anytime.
What Happens If You File For Bankruptcy
Filing for bankruptcy is a legal process that will help the applicant either completely get rid of their debt or come up with a plan to repay their debt. The process begins with the debtor filing a petition with the bankruptcy court. As the debtor, you must complete several forms detailing personal information such as your assets, income, creditors, and expenses. It is important to note that during this process, creditors cannot collect on their debt. Once you have provided all the necessary information, the court will appoint a trustee who will ensure your secured debt is collected within the appropriate time.
This opportunity for a fresh financial start comes at a cost in legal fees and damage to your credit score. Filing bankruptcy will remain on your credit report for seven years or ten years . This process can make it difficult to obtain a mortgage or car loan in the future. It can also affect your ability to obtain employment or rent an apartment and increase your insurance rates. Since bankruptcy has long-term legal and financial consequences, consulting with a bankruptcy debt relief agency such as Debt Quest USA is highly encouraged. We will ensure all the paperwork needed is filled out correctly during this confusing and sometimes complicated process. Well also explain, in clear terms, exactly what happens if you file bankruptcy.
Understanding The Types Of Bankruptcy
For individuals and families struggling with financial hardship, there are two main types of bankruptcies: Chapter 7 and Chapter 13.
A Chapter 7 bankruptcy is essentially a request for the court to forgive your debts entirely.
If approved, youll be able to walk away from any outstanding, loans, or other financial burdens.
This is ideal for individuals who just want to be able to start over.
However, youll also likely lose most of your personal property.
This is because the court uses that property to help offset the financial loss your creditors face when you walk away from those debts.
Chapter 13 bankruptcy provides you with partial debt forgiveness.
If the court accepts your case, theyll help you create a payment plan to repay some of your debts while forgiving whatevers left at the end of the payment plan.
Every case is different.
The court decides the payments youll have based on your financial situation, total debt, and the information you disclose to the court.
What Are The Time Limits
The type of bankruptcy filed in the previous case determines the time limit between cases. The time starts to run on the date the prior case is filed with the bankruptcy court. The date the discharge was entered doesnât matter.
Chapter 7 bankruptcy â¡ï¸ Chapter 7 bankruptcy: 8 years
This is the longest amount of time between cases required by the Bankruptcy Code. Chapter 7 provides the quickest form of debt relief through a bankruptcy filing and doesnât require the filer to complete a repayment plan before getting their bankruptcy discharge.
Chapter 7 bankruptcy â¡ï¸ Chapter 13 bankruptcy: 4 years
It is possible to file Chapter 13 bankruptcy soon after receiving a Chapter 7 discharge, the filer just wonât be eligible to receive a Chapter 13 discharge in the second case. So, someone who successfully discharges their unsecured debts through Chapter 7 can file a Chapter 13 bankruptcy to pay off tax debts or other types of debt that survived the prior case.
Chapter 13 bankruptcy â¡ï¸ Chapter 7 bankruptcy: 6 years
This waiting period can be waived if you paid back 100% to your unsecured creditors in your Chapter 13 plan and the original case was found to be in good faith. Plus, since a Chapter 13 repayment plan can take up to 5 years to complete before resulting in a discharge, itâs possible to file Chapter 7 bankruptcy about 1 year after receiving a Chapter 13 discharge.
Chapter 13 bankruptcy â¡ï¸ Chapter 13 bankruptcy: 2 years