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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Bankruptcy Is Not A One
For most people, bankruptcy seems like a last-case scenario something you only want to do once in your life, if that. The truth is, though, it is simply a legal tool, and one that can be very beneficial if you find yourself in dire financial straits.
With everything that has happened in the last twelve months, many people are curious as to whether they might be eligible for bankruptcy. Those who have previously filed or had a successful bankruptcy discharge may be concerned about whether they will be eligible to do so again, and what the time frame regarding their right to another filing might be.
Since the goal of bankruptcy is the discharge of debt and the relief from overwhelming financial strain, there are technically no laws regarding how many times a person can seek this relief during their lifetime. When it comes down to it, the question is less of how many times you can file for bankruptcy, but how many times and how often you can receive a discharge of your debts.
What Accounts Are Included In Bankruptcy
Usually, a person declaring bankruptcy is having serious difficulty paying their debts and their accounts are often significantly delinquent.
If an account was delinquent when it was included in the bankruptcy, it will be deleted seven years from its original delinquency date, which is the date the account first became late and was never again brought current. Declaring bankruptcy does not alter the original delinquency date or extend the time the account remains on the credit report.
If the account was never late prior to being included in bankruptcy, it will be removed seven years from the date the bankruptcy was filed.
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Filing For Bankruptcy A Second Time Get A Free Consultation
Filing bankruptcy can be complicated and depend on the nuances of your situation. know what you are going through and the most effective path to move forward.
There is no easy way to get a fresh start. But, there are options and tactics to help you rebuild credit, pursue a second discharge, or work towards a better financial situation.
How Chapter 7 Works
A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. In addition to the petition, the debtor must also file with the court: schedules of assets and liabilities a schedule of current income and expenditures a statement of financial affairs and a schedule of executory contracts and unexpired leases. Fed. R. Bankr. P. 1007. Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case . 11 U.S.C. § 521. Individual debtors with primarily consumer debts have additional document filing requirements. They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling evidence of payment from employers, if any, received 60 days before filing a statement of monthly net income and any anticipated increase in income or expenses after filing and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302. Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors.
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Can You Get A Credit Card After Filing For Bankruptcy
Yes, you can get a credit card after filing for bankruptcy. That said, a bankruptcy will make it very difficult for you to get a regular unsecured credit card, however, you can apply for an unsecured credit and build good credit history for that account. The only difference between a regular credit card and a secured credit card is that to get a secured credit, you need to pay a security deposit and the deposit that you pay will be your credit limit.
Filing For A Second Bankruptcy In California
If you are filing for bankruptcy in California, you are not alone. At close to a quarter million annual petitions, California has more bankruptcy cases than any other state, and 97% of these are consumer filings. For most of these filers, bankruptcy will be a once-in-a-lifetime occurrence. But 8% of all bankruptcy filers will return to court in the future to claim bankruptcy once more.
The good news is that if youre struggling with debt, you are allowed by law to file not only for a second bankruptcy but also a third, fourth, etc., if necessary. The caveat is the waiting period between bankruptcies, an issue for which United States Bankruptcy Courts maintain strict stipulations.
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Will A Bankruptcy Ruin Your Credit Forever
No, a bankruptcy will not ruin your credit forever. When you first file for bankruptcy your credit score will take the biggest hit. As the bankruptcy ages, your credit score will improve so long as you responsibly borrow and make timely payments. Also, a bankruptcy only remains on your credit report for 10 years. After the 10 year period, the bankruptcy will be removed and your credit score will increase.
The Benefits Of Filing Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows you to erase overwhelming debt and get a fresh start managing your finances. It can relieve you of the responsibility to repay your creditors and eliminate most or all your current debt. This option is designed to give debtors a clean financial slate.
A critical benefit of filing bankruptcy is that all debt collection efforts must stop as soon as you file. This benefit can provide relief from demanding letters and phone calls that only add stress to an already challenging financial situation.
Another advantage of Chapter 7 bankruptcy is that it does not require you to file a repayment plan. Instead, you are allowed to retain your assets, and the courts discharge all your qualifying debts.
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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.
When To Consider Filing Chapter 7 Bankruptcy
So, when is Chapter 7 the better option?
- Your debt is mostly unsecured .
- Your income isnt enough to cover your basic living expenses.
- You dont have enough money for a bankruptcy lawyer.
- You dont have non-dischargeable debts that youll be stuck with even after bankruptcy.
- You cant commit to at least a three-year repayment plan.
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How Much Will Credit Score Increase After Bankruptcy Falls Off
Your credit score will increase by 50 to 150 points after a bankruptcy is removed from your credit report. The removal of bankruptcy can dramatically increase your credit score because bankruptcy is the most negative item that can appear on your credit report. The amount of points your credit score will increase depends on other items you have on your credit report.
If you have other negative items bringing down your credit score, you might not see a huge increase. But if nothing else is affecting your credit score, the removal of bankruptcy will likely result in a huge increase in your credit score.
If, after filing for bankruptcy, you open new accounts, make all of your payments on time, you should see a substantial increase in your credit score once the bankruptcy is removed from your credit report.
Many people have reported that their credit score has increased by 50 to 150 points after the bankruptcy fell of their credit report. That said, some saw a 50 point increase, others saw a 91 point increase, and others experienced a 150 point increase. So, your point increase will vary depending on the information in your credit report.
If, after filing for bankruptcy, you opened new credit cards, racked up a lot of new debt, and missed payments on your account, you will be hurting your credit score and the removal of a bankruptcy would have little to no impact on your credit score because the new derogatory information will drag your credit score down.
Complaints Seeking Revocation Of Discharge Will Require Retaining Counsel
Keep in mind that the mere filing of an adversary proceeding seeking to revoke the discharge will require hiring an attorney to answer the allegations of improper conduct. If these allegations are not addressed in a timely fashion, the debtor will lose their discharge by default.
The possibility that a bankruptcy discharge can be revoked highlights the importance of full disclosure to your bankruptcy attorney. You must inform your bankruptcy attorney of all assets and debts in order to ensure that your discharge is not subsequently challenged.
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Can I File For Bankruptcy Twice
Chapter 7 Bankruptcy-If you have previously filed a Chapter 7 bankruptcy and received a discharge in your previous case then you can file for bankruptcy again and you can be entitled to another discharge in the following situations:
- Chapter 7 Bankruptcy If you need to file for Chapter 7 Bankruptcy after you have filed a previous Chapter 7 bankruptcy and received a discharge then you need to wait 8 years from the date you filed your previous Chapter 7 bankruptcy. If you file prior to the 8 years, then you will be denied a discharge. If you are denied a discharge, then you will still be legally responsible for your debts. You start to count the 8 years from the date you filed your previous Chapter 7 bankruptcy. If you filed your previous Chapter 7 bankruptcy in July of 2000, then you are eligible to file again and get a discharge in July 2008.
Chapter 13 Bankruptcy If you have previously filed a Chapter 13 bankruptcy and you received a discharge in your previous Chapter 13 bankruptcy then there are time limits for filing another Chapter 13 or Chapter 7 bankruptcy. You can file for bankruptcy again, but there are time limits in order for you to obtain a full discharge of your debts.
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
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From Chapter 13 To Chapter 7 Bankruptcy
If you received a discharge in a previous Chapter 13 bankruptcy, you must wait six years from the date the Chapter 13 was filed before you can file a Chapter 7 bankruptcy and receive a discharge. However, there are two little-known exceptions to this general rule. If you paid back 100% of your unsecured creditors you can immediately file a Chapter 7 bankruptcy. In addition, you can file a Chapter 7 bankruptcy immediately after Chapter 13 bankruptcy discharge in certain cases. If you paid back 70% of your unsecured debts, your plan was proposed in good faith and you used your best effort to pay your debt.
When Should I File For Chapter 7 Or Chapter 13 Bankruptcy
Some things bear repeating: There are consequences of bankruptcy, so consider your options carefully. If its affordable, consult with an attorney. Between court fees and attorney fees, the cost of bankruptcy can be thousands of dollars.
Of the two options, Chapter 7 is more popular because filers dont have to pay back part of their debts. Chapter 13 may be a better solution if youre in arrears on your mortgage and dont want to lose your house because you will have time to get caught up. The same is true for debts like back taxes and spousal/child support, which wont go away in bankruptcy.
Consider:
- What kind of debt do you have? Secured? Unsecured? Dischargeable? Non-dischargeable?
- How much of your property is non-exempt, which means it can be sold to pay off debts? Non-exempt assets are typically not necessary for your home, your job or your daily life.
- Is your regular monthly income enough to cover your living expenses?
- How important is clearing the bankruptcy from your credit report, which happens faster with Chapter 13?
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What Debts Are Discharged In Chapter 7 Bankruptcy
A Chapter 7 bankruptcy will generally discharge your unsecured debts, such as credit card debt, medical bills and unsecured personal loans. The court will discharge these debts at the end of the process, generally about four to six months after you start.
Some types of unsecured debts usually aren’t discharged through a Chapter 7 bankruptcy, including:
- Child support
- Personal injury debts you owe due to an accident while you were intoxicated
- Unsecured debts that you intentionally left off your filing
Your creditor could also object and keep certain debts from getting discharged. For example, a credit card company could object to the debt from recent luxury goods purchases or cash advances, and the court may decide you still need to repay this portion of the credit card’s balance.
Additionally, a Chapter 7 bankruptcy may discharge the debt you owe on secured loans. Secured loans are those backed by collateral, such as your home for a mortgage, or when a creditor has a lien on your property. However, even if the debt is discharged, the creditor may still have the right to foreclose on or repossess your property.
How To File For Chapter 7 Bankruptcy
You can choose to file for Chapter 7 bankruptcy on your own or hire an attorney to help. Some legal aid centers and nonprofit credit counseling agencies may also be able to offer you free assistance. Once you determine that you’re eligible, the process will be largely the same:
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