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, you’d need to wait six years before filing for a Chapter 7 discharge. You won’t 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, you’d have to wait four years from the Chapter 7 filing date before filing a Chapter 13 case.
What Can The Debtor Do If A Creditor Attempts To Collect A Discharged Debt After The Case Is Concluded
If a creditor attempts collection efforts on a discharged debt, the debtor can file a motion with the court, reporting the action and asking that the case be reopened to address the matter. The bankruptcy court will often do so to ensure that the discharge is not violated. The discharge constitutes a permanent statutory injunction prohibiting creditors from taking any action, including the filing of a lawsuit, designed to collect a discharged debt. A creditor can be sanctioned by the court for violating the discharge injunction. The normal sanction for violating the discharge injunction is civil contempt, which is often punishable by a fine.
Issues With Chapter 7 Conversion
When you file for Chapter 13 bankruptcy, part of the process will be that the court will officially approve a repayment plan you must follow to receive a final discharge. If you cant agree on a plan that the court will approve, in some cases, you can convert your filing to Chapter 7.
However, if you already filed once, you have these varying time requirements before your second discharge. So, converting a Chapter 13 filing to Chapter 7 can be a problem. You may be past the amount of time required to receive a discharge with Chapter 13, but not long enough to receive a discharge with Chapter 7.
This makes having the right bankruptcy services on your side even more essential on a second bankruptcy, because you may be navigating some tough waters.
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Can I File Again
However, many people assume that if the bankruptcy is still listed, they cant file again. The confusion can lead to questions like this:
Question:;Ive been working with a debt settlement company since May 2017. They have settled six of my accounts with three more to go.
I chose not to do bankruptcy because it was still showing on my credit report, although it was discharged in 2006. And I didnt know if I can file again.
How I got to this point was through unfortunate circumstances and bad habits. Ive been living paycheck to paycheck, so I used payday loans anytime I had an emergency. ;Then I got a car title loan just to pay other loans. Now Im stuck with a foolish car title loan until October 2020.
The debt settlement has given me some relief. But I still have quite a bit to go, and I find myself being in the red each month. I have a budget for each pay period, but I still end up using overdraft funds almost every month.
Sometimes, Im over by a $100 and sometimes by $300. It depends on what has happened unexpectedly in that pay period. Those additional fees of $28 each can add up. Ive cut back all that I can and just pay my bills. I do get an extra $200 a month for keeping my grandchild on weeknight and weekends.
What can I do more to help with my financial difficulties?
Jo in California
After Chapter 13 Dismissal
As a continuation of the above example, say a circumstance arises and you’re not able to make the payments on your Chapter 13 repayment plan. Usually, when that happens, you won’t be granted a discharge of your debts unless you’re eligible for and request a hardship discharge. Instead, your case will be dismissed.
If your Chapter 13 case is dismissed, you can file another case right away.;For strategic reasons, some debtors will file and dismiss several cases in quick succession. This isn’t necessarily a good idea, but it is possible.
The debtor, facing a threat to their property, files the bankruptcy case to stop a repossession or foreclosure. When the danger passes, the debtor will either ask the court to dismiss the case or more likely, stop making plan payments, which will result in a dismissal.
When the creditor renews its collection efforts, the debtor files a new case. To combat debtors who game the system in this way, Congress included provisions in the Bankruptcy Code that allow debtors to file new cases. But, the Bankruptcy Code also limits how the debtor can use the;automatic stay in such situations.
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Consider A Consumer Proposal As An Alternative To A Second Bankruptcy
A better route than filing bankruptcy a second time may be to file a;consumer proposal.
Filing a consumer proposal vs bankruptcy the second time around is often better than a repeat bankruptcy because:
- It falls off your credit report sooner.; A consumer proposal remains on your credit for 3 years after completion. So a 5 year proposal means your credit is affected for only 8 years, not 16-17 as in a second bankruptcy.
- You can pay your proposal off faster if you want. If you pay off your proposal sooner, it falls off your credit report sooner as well.
- Once your proposal is accepted, there is no risk that your creditors may oppose your discharge.
It would still cost more , but you can spread this out over up to 5 years to make the payment more manageable. You also have the option to make additional payments to pay off your consumer proposal faster if your financial situation improves.
But the main reason many people choose to file a consumer proposal is the effect on their credit rating. The difference is substantial enough that in most cases people file a consumer proposal the second time around.
If you are;trying to decide what to do, Hoyes Michalos can help. Call us;and;together we can develop a plan that is right for you.
Are There Limits To How Often You Can File Bankruptcy
While nobody dreams of filing bankruptcy someday, there are situations where bankruptcy is not only the best solution but the only way delinquent debts can be resolved. If someone finds they have an expensive medical condition and racks up hundreds of thousands of dollars in medical debt, for example, they may never pay those debts off through traditional means.
Because life can be messy, there are also times when it could make sense to file bankruptcy more than once. Maybe all your debts werent resolved the first time around, or perhaps you fell back on hard times after your first bankruptcy was complete. Filing for bankruptcy more than once may not be ideal, but it does happen.
According to Shawn M. Yesner of Yesner Law in Clearwater, Fla., you can file for bankruptcy as many times as you feel appropriate. However, you are only able to obtain a discharge of your debts in the new case if there was an adequate amount of time between each bankruptcy filing.
The designated waiting limits between each bankruptcy filing depend on the type of bankruptcy you last filed for as well as whether your previous case was successful or dismissed.
If the previous bankruptcy case was successful, then traditional waiting limits apply. However, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has prohibitions to prevent serial filers or consumers who seek to file bankruptcy over and over from taking advantage.
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How Many Bankruptcies Can You File
If youre wondering how many years you need between bankruptcies, you need to know that it is possible to file for more than one bankruptcy in your lifetime. In fact, you can submit an unlimited number of bankruptcy cases unless a bankruptcy court orders otherwise, but you are entitled to a limited number of discharges.
There are various types of bankruptcy that individuals or spouses can file for, with the most common being Chapter 7 and Chapter 13. If youre wondering how often you can file chapter 8 or chapter 13, keep reading.
Where Can You Look For Advice On Filing For Bankruptcy
- AllLaw: is a free online resource that aims to help users in all their legal needs. They have a large amount of information covering bankruptcy, the types of bankruptcy, and how to file for bankruptcy. They can also help you find an expert attorney in your area who can assist you in filing for bankruptcy in the correct and most beneficial way.
- Bankruptcy Options Center: This is a free online resource that helps visitors establish what the available bankruptcy options are.
- Debt.org: An organization that aims to help Americans who are struggling with debt. They provide information on debt consolidation, settlement, student loans, bankruptcy and mortgages.
- LegalZoom: This is an online legal technology company. They help users create legal documents without the help of an attorney and have some great resources to help you understand the law. LegalZoom has a section of its site dedicated to bankruptcy.
All these sources confirm that you can file for bankruptcy as often as you want. But this doesnt mean that your debt will always be wiped clean. You need a discharge from the court to relieve you from your obligation to pay a debt but receiving this will depend upon the type of bankruptcy you file for.
If your aim is to wipe the slate clean and start again, what you should really be asking is not how often you can file for bankruptcy, but how often you can be discharged.
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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.
If I Filed Bankruptcy Before How Long Before I Can File Again
Imagine you file a Chapter 13 case and do well making payments for a year or two, but then chaos ensues. Perhaps you lose your job, get sick, or find that you can’t keep up with your repayment plan.;
Although you may have used a bankruptcy filing to get out of prior financial struggles, unfortunately, federal law limits how often you can file a new bankruptcy case. And even if you’re allowed to file a case, one of the benefits of that filingthe automatic staymay be restricted or delayed.
An automatic stay stops creditors from taking actions against debtors. It stops collections calls, foreclosures, and repossessions.
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Chapter 20 Bankruptcy: Filing Another Bankruptcy Before The Time Limit Is Up
The time limits above refer to how long a debtor has to wait to discharge debt through another bankruptcy. If you aren’t looking for another debt discharge, but would like to arrange a plan to manage your remaining debts, filing a Chapter 13 bankruptcy immediately after a Chapter 7 discharge might be an option for you.
Filing for Chapter 7 and Chapter 13 in succession is informally called a “Chapter 20 bankruptcy.” The process of filing for Chapter 13 right after the Chapter 7 discharge process can be complicated, and many courts will not allow a double filing before the time limit is up. An attorney can explain the strategy behind double filing and how it may fit into your specific circumstances.
If Your Previous Bankruptcy Was A Chapter 13
If you successfully filed for Chapter 13 bankruptcy in the past, this means you had your debts restructured so you could pay them off over three to five years. This also means that you were able to keep your personal property throughout the bankruptcy process.
If you are in a position where you need to file bankruptcy again after a Chapter 13 bankruptcy, you will find that the waiting limits arent quite as severe.
According to Jay Fleischman, a consumer protection attorney with over 20 years of experience representing people in bankruptcy cases, you can file for Chapter 7 bankruptcy any time after a Chapter 13 bankruptcy provided your previous bankruptcy case resulted in you paying off all debts included in the case. The court may, however, allow another discharge if the old case paid at least 70% of your creditors and the new Chapter 13 plan was proposed in good faith and represents your best effort, said Fleischman.
If your Chapter 13 bankruptcy did not result in you meeting these requirements, then you must wait six years from the date of your Chapter 13 filing to file for Chapter 7 bankruptcy.
If you filed for Chapter 13 in the past, you are also eligible to receive a discharge in a Chapter 13 case as long as the first case was filed more than two years before the new one, noted Fleischman.
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Get Help From Acclaim Legal Services
As you can see, there are many reasons why re-filing a bankruptcy may be necessary and beneficial. Further, there are several variables and nuances that dictate when and what protections can be established by a re-filed bankruptcy.
Contacting an experienced bankruptcy attorney should be your first step in the process of exploring your options on how many times can you file bankruptcy. We offer free same-day bankruptcy evaluations.
Please call us toll free at 866-261-82822 or;schedule a consultation right now.
How To Get Out Of Debt Keep The House Car Retirement Savings And Finally Get A Fresh Start
Filing Bankruptcy Cases Under Different Chapters;
If youre filing under a different chapter the second time around, the following rules apply:;
- Chapter 7 after Chapter 13 According to Title 11 Section §727 of the U.S. Code, if your first filing was under Chapter 13, you will not be granted a discharge under a Chapter 7 until at least six years has passed from the date you filed your Chapter 13.
- Chapter 13 after Chapter 7 According to Title 11 Section §1328; of the U.S. Code, if your first case was a Chapter 7, you only have to wait four years before filing a Chapter 13.;
Filing for Bankruptcy for Reasons other than Discharge;
Keep in mind that the time limits discussed only pertain to discharges, not to filings. There is no limit to amount of times you can actually file. While seeking a discharge of debts is the most common reason to file for bankruptcy, its not the only reason.
Some file for the automatic stay which prevents creditors from collecting on debts. Depending on your circumstances, this could help you stop collection efforts and catch up on your payments.;
Running into Difficulties with Repeat Bankruptcy Filings;
There may be no legal limit on how many times you can file for bankruptcy in Texas but the courts will take a good look at why the debtor is filing for a subsequent bankruptcy. First, lets review why bankruptcies were written into American law.
Discuss Your Options with a Bankruptcy Attorney;
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Are All Of The Debtor’s Debts Discharged Or Only Some
Not all debts are discharged. The debts discharged vary under each chapter of the Bankruptcy Code. Section 523 of the Code specifically excepts various categories of debts from the discharge granted to individual debtors. Therefore, the debtor must still repay those debts after bankruptcy. Congress has determined that these types of debts are not dischargeable for public policy reasons .
There are 19 categories of debt excepted from discharge under chapters 7, 11, and 12. A more limited list of exceptions applies to cases under chapter 13.
Generally speaking, the exceptions to discharge apply automatically if the language prescribed by section 523 applies. The most common types of nondischargeable debts are certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units for fines and penalties, debts for most government funded or guaranteed educational loans or benefit overpayments, debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated, debts owed to certain tax-advantaged retirement plans, and debts for certain condominium or cooperative housing fees.
What Does The Law Say About The Number Of Times You Can Declare Bankruptcy
Surprisingly, there is no statutory limit on how many times a person can declare bankruptcy in their lifetime. There are limits on how frequently debt can be discharged, and abuse of the system could definitely land the filer with legal difficulties.
In one of the most prolific cases, a California couple was barred from filing again after their 9th failed filing in 7 years!
Bankruptcies in all states are governed by Federal law, specifically United States Code Title 11. Encompassing 238 pages as of the latest revisions, entire chapters of this legislation are dedicated to a single type of bankruptcy and its particular rules and regulations. This is why an adjustment of debts of an individual with regular income is commonly called a Chapter 13 Bankruptcy, and why liquidation of assets to settle debts is called a Chapter 7 bankruptcy.
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