Bankruptcy Filing Vs Discharge
As we have explained, there is no limit on the number of times a person or a business can file for Chapter 7, Chapter 11, or Chapter 13 bankruptcies. To be clear, bankruptcy itself is merely a filing process with the Federal District Bankruptcy Court which opens up your case including your assets, debts, liabilities, and inability to pay for review.
However, in all but a few cases, a bankruptcy filing also generates something called an automatic stay from creditors, meaning that after you file bankruptcy in federal court, your creditors are legally prevented for a certain amount of time from pursuing you in the state courts for failure to pay your debts. An automatic stay is like a shield, preventing creditors from suing you while the bankruptcy trustee and judge work together to assess your case.
Different from a bankruptcy filing, which happens at the beginning of your case, is a bankruptcy discharge, which happens at the end of your case. Discharge means that the court has reviewed your financial situation, determined you are unable to pay some or all of your debts and discharged your obligation to pay them.
Chapter 13 To Chapter 7 Filing
Typically, an individual will need to wait six years after filing a Chapter 13 bankruptcy to then file under Chapter 7. However, it is possible to file under Chapter 7 sooner than six years in certain cases.
For example, if you paid off your creditors under Chapter 13 in your original repayment plan and received a discharge, you may then be able to file again under Chapter 7.
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Will Bankruptcy Ruin My Credit
Filing for bankruptcy does not ruin your credit score but it will appear on your credit report. If you file for Chapter 7 bankruptcy, the fresh start that you receive through discharging your debt will allow you to rebuild credit over time without having the concern of previous debt hanging over your head. If you file Chapter 13 bankruptcy, your credit repair begins with your first plan payment (so shortly after your case is filed, as long as you continue to make you plan payment your credit will build through-out your bankruptcy case.
Filing Chapter 13 After A Chapter 7 Discharge: 4 Years
After a Chapter 7 discharge, you must wait a minimum of four years from its filing date before you can open another case.
You may be able to avoid the four-year wait and file Chapter 13 immediately with the caveat that your new Chapter 13 cannot be discharged. You might want to do this to set up a payment plan for debt you couldnt wipe out in your Chapter 7. When you follow a Chapter 7 with a 13 in order to handle remaining debts under a payment plan, its sometimes nicknamed a Chapter 20.
What If The First Case Was Not Discharged
If the court dismissed the first case, you can file again and receive a discharge in the second bankruptcy case unless the court instructs otherwise. You may need to wait 180 days to file a second time if you voluntarily dismissed the first filing or failed to obey a court order.
If the court denied your discharge, you might be allowed to file again but may not be eligible for a discharge of the debts listed in the first case. There are other special circumstances that you may or may not qualify for, and it would be wise to seek the advice of an experienced bankruptcy agency.
Different Types Of Bankruptcy Explained
A Chapter 7 bankruptcy eliminates most debt, including credit card debt, without requiring repayment of any kind. Instead of a repayment plan, the Chapter 7 bankruptcy process liquidates your non-exempt assets to partially repay your debts. A Chapter 13 bankruptcy allows you to keep all of your property as long as the monthly repayment plan pays for the value of your assets. The debts that donât get paid as part of the repayment plan are discharged once the plan has been completed. The discharge of your debts gives you the fresh start you need.
The Chapter 11 bankruptcy process provides similar relief to that provided in Chapter 7 and Chapter 13, but is generally reserved for filers with businesses or significant assets and is a lot more expensive than even a Chapter 13 bankruptcy. This article will focus specifically on Chapter 7 and Chapter 13 bankruptcy.
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Chapter To Chapter Options
Chapter 7 to another Chapter 7 bankruptcy 8 years Chapter 7 now filing for Chapter 13 bankruptcy 4 years Chapter 13 now filing for Chapter 7 bankruptcy 6 years Chapter 13 to another Chapter 13 bankruptcy 2 years
The wait times help prevent abuse of the system and high credit card debt that cannot be repaid. You are expected to make your best effort to pay off bankruptcy in between filings.
How Often Can I Receive An Order Of Discharge
If your previous case was a Chapter 7 and you would like to file a new Chapter 7 case, you will typically need to wait 8 years from your first filing date to file your second case. If your previous case was a Chapter 13 and you want to file a Chapter 7 case you will typically need to wait 6 years from the date of your first filing date to file your second case and receive a discharge.
There are circumstances in which it could be beneficial to file a new bankruptcy case even if you will not receive an order of discharge. If you are considering filing for bankruptcy and have previously filed, it is extremely beneficial to meet with an experienced bankruptcy attorney to better understand your options.
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What Is The Main Reason That People File For Bankruptcy In The United States
Broadly speaking, the number one reason that people file bankruptcy in the United States is because their debt has exceeded their ability to pay it. There can be many reasons why people find themselves in this situation. Oftentimes, consumers will have faced unexpected health issues, a divorce or a separation they may have had a long or short-term change in their employment situation, they may have retired, or they have gone through a long-term adjustment to a fixed income.
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Can I File For Bankruptcy And Still Keep My Car
Typically, yes. In fact, many people file bankruptcy in order to prevent their car or truck from being repossessed by a creditor. If you file for Chapter 13 bankruptcy, the debt associated with your car will be worked into your repayment plan. If you file for Chapter 7 bankruptcy, you can choose to reaffirm your car loan through a reaffirmation agreement.
How Much Debt Do I Need To Be In To File Bankruptcy
There is not a specific dollar amount of debt that an individual or couple must reach before filing for either a Chapter 13 bankruptcy or Chapter 7 bankruptcy however, some situations may not warrant filing for bankruptcy. The best way to determine if bankruptcy is the best form of debt relief for your situation is to meet with a qualified New Orleans bankruptcy lawyer from our firm.
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You Will Have A Trustee That Will Manage Your Bankruptcy
A trustee is the person or entity that manages your bankruptcy. They work with you, and your creditors, to achieve a fair and reasonable outcome for all. During bankruptcy, you have an obligation to provide information to your trustee, including changes to your circumstances. This may involve supplying books, bank statements and other documents that the trustee asks you to provide.
When you apply for bankruptcy, you can choose a registered trustee. If you do not choose a trustee, your bankruptcy may initially be administered by either the Official Trustee or a registered trustee.
How Many Times Can You File Bankruptcy
There are time limits between filings, but there is no limit on the number of times you can file. Theoretically, someone with faulty debt-management skills could file a dozen or more bankruptcies in their lifetime.
That would make for some tough financial sledding, but at least they might make the Guinness World Records for Worlds Lowest Credit Score.
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Get Help From A Professional Bankruptcy Lawyer
As long as you stick to the time limits between bankruptcies, feel free to apply again to save yourself from the current financial challenges.
Do you need help filing for bankruptcy in Stroudsburg? JPP Laws bankruptcy attorneys can help you navigate the filing process and understand the timelines better.
Chapter 7 To Chapter 13 Filing
Moving from a Chapter 7 bankruptcy filing in the past to a Chapter 13 filing now is a common route repeat filers take. The waiting period between filings is four years when going in this direction.
For example, someone could have used Chapter 7 in the past to discharge unsecured debts. Now, they may want to go with Chapter 13 to help pay off still-existing debts from the original filingthis is a common step for tax debts.
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What Will I Lose If I File Bankruptcy
You wont lose all of your property when you file for bankruptcy. Bankruptcy law allows you to exempt, or take out of the bankruptcy estate, the things you need to maintain a home and job, such as household furnishings, clothing, and an inexpensive car.
Filing Under Chapter 13
Individuals who want to keep their properties while getting back on track can file for Chapter 13 bankruptcy. Similar to Chapter 11, you enter into a debt repayment plan, which allows you to pay back your debt in installments within three to five years. Businesses that still earn consistently may also file for this type.
How soon can you file Chapter 13 after Chapter 13?
You can file for another Chapter 13 bankruptcy after two years since you first filed for a Chapter 13 bankruptcy case and your debt was discharged. This rarely happens, though. Remember, repayment plans for Chapter 13 bankruptcy are a minimum of three years. So, you must have an unexpected financial hardship to receive a debt discharge before the three years is over.
When can you file under Chapter 7 after Chapter 13?
If your previous bankruptcy case is under Chapter 13 and you want to file for Chapter 7 bankruptcy, you have to wait for six years to elapse. However, if youve already paid all your unsecured debt or at least 70% of your unsecured debts in the repayment plan, the waiting period doesnt apply to you.
Heres a table to give you a clearer view of the waiting periods:
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When The Court Dismisses Your Bankruptcy For Other Reasons
If the court dismisses your bankruptcy case and you file another case within one year, the automatic stay in the new matter would be limited to 30 days. If you had two or more dismissals within one year of your new bankruptcy, you wouldn’t receive the benefit of the automatic stay.
In either situation, the remedy is to file a motion asking the court to order or extend the automatic stay in your current case. You’ll need to explain why doing so would be fair in the present matter.
What Is the Automatic Stay in Bankruptcy?
The automatic stay is the cornerstone of bankruptcy. It protects you from collection actions while the bankruptcy court processes your case. For instance, the automatic stay prohibits creditors from calling or contacting you about collecting their debt, as well as lawsuits and foreclosure actions. If a creditor harasses you or continues its collection efforts against you in violation of the automatic stay, you will typically have grounds to seek damages against it.
Also, automatic stay penalties exist for debtors, too, for instance, if you commit bankruptcy fraud by hiding assets, lying on your bankruptcy papers, or otherwise filing your case in bad faith. The bankruptcy court can prohibit you from filing another bankruptcy for a more extended period or prevent you from wiping out any of the debts listed in the current case.
Filing Without Seeking A Discharge
In a few cases, a debtor may want to file for bankruptcy to extend the time in which they can pay off the debt. A repeat filing under Chapter 13 may be useful in these cases because it can spread the payments on the debt across the three to five years of the repayment plan. A debtor also may want to file under Chapter 13 immediately after getting a discharge under Chapter 7. This is often known as Chapter 20 bankruptcy.
A Chapter 20 bankruptcy may help debtors who have a substantial amount of debt but want the benefits of the repayment plan under Chapter 13, which allows them to pay off debts over time. Filing under Chapter 7 can help you trim your overall debt to be more manageable so that you can qualify for Chapter 13 and have a better chance of paying off your remaining debts efficiently. Even though the ensuing Chapter 13 case will not result in a discharge, it will allow you to catch up on substantial debts related to important assets, such as your home or car. It also can help you pay off debts that are not dischargeable. In some situations, a debtor can strip off second or subsequent mortgages through Chapter 20 as well.
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Are There Other Options For Filing Bankruptcy Sooner
When you hire a bankruptcy attorney from our firm to represent you during this process, we could potentially identify a way around the typical waiting periods.
Additionally, one of our lawyers could discuss different routes for you to take versus filing for bankruptcy again. Our team has multiple strategies we can deploy to help you with debt relief. Some of these may be better options than filing for bankruptcy.
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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You Want To File Chapter 7
- If your prior case was one of the following, you’ll have to wait :
- Chapter 7: 8 years
- Chapter 11: 8 years
- Chapter 12: 6 years.Exception: You do not have to wait at all if your prior case paid either 100% to unsecured creditors or at least 70%and your plan was in good faithand represented your best efforts
- Chapter 13: 6 years. Exception: You do not have to wait at all if your prior case paid either 100% to unsecured creditors or at least 70%and your plan was in good faithand represented your best efforts