It Takes Longer And Costs More
Where a so-called second-timer used to have his discharge granted by the courts, one must now wait a full 24 months for a trustee to grant his automatic discharge , no visit to the courts necessary.
New rules have upped the ante for returning bankrupts considerably. As a rule of thumb, know this: the more bankruptcies, the harsher the penalties, to the point of a repeat offender being denied discharge altogether .
Consecutive Chapter 13 Bankruptcies
- If your debts were discharged in a prior Chapter 13 bankruptcy case, you must wait two years from the date the old Chapter 13 case was filed to file a new Chapter 13. A Chapter 13 bankruptcy case normally takes 3 to 5 years to complete. So, the average debtor can file a new Chapter 13 as soon as the old one is discharged.
- If your prior Chapter 13 bankruptcy case is dismissed , you can file a Chapter 13 case immediately. However, if this is the second active Chapter 13 case youve had within a 12-month period, the automatic stay only applies for 30 days. You must file a Motion to Extend the Automatic Stay. In addition, you must show the bankruptcy judge that your financial circumstances are different now than when your previous bankruptcy was filed and that you will now be able to successfully complete the new Chapter 13 case.
- If the new Chapter 13 bankruptcy will be your third Chapter 13 in the last 12 months. There is NO automatic stay when the case is filed. You will need to file a Motion to Impose Automatic Stay. Also, you must show the bankruptcy judge that your financial circumstances are different now than when your previous TWO bankruptcies were filed and that you will now be able to successfully complete the new Chapter 13 case. For those with a third Chapter 13 case within the last 12 months, you really need to discuss your situation a qualified bankruptcy attorney to determine what course of action is best for you.
Is Personal Bankruptcy The Only Solution
No. There are alternatives to bankruptcy in Canada. When your Licensed Insolvency Trustee completes their assessment of your financial situation, they will discuss any alternatives that may work for you. In some cases, the Trustee may recommend a debt consolidation loan, a credit counselling program or a consumer proposal. Each of these options has its own set of pros and cons, and not everyone will qualify for all of them.
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After Receiving A Discharge In A Chapter 13 Bankruptcy:
- Before filing another Chapter 13: You must two years after your prior Chapter 13 filing which resulted in your debts being discharged. Filings before two years had elapsed would not allow you to receive a discharge.
- Before filing for a Chapter 7: If you failed to repay your debts under the terms of your Chapter 13 discharge, you must wait 6 years from the date of filing before being eligible to file for a Chapter 7 bankruptcy. But if you successfully repaid your debts under Chapter 13 before running up more, or if you repaid more than 70% of your Chapter 13 debts in good faith, you could file for discharge through a Chapter 7 bankruptcy.
Talk To A Bankruptcy Attorney To Find Out What The Best Option Is
Are these options confusing? Have you never filed for bankruptcy before? Or have you filed but never had your bankruptcy discharged? No matter where you are in the process, you can benefit from talking to a bankruptcy attorney. Call The Law Offices of Paul Y. Lee at 888-748-0025 now for your free bankruptcy consultation. We are standing by to ensure you understand your options and can make the most informed choice.
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Contact Parker & Dufresne Today
Facing the decision to file for Chapter 7 or Chapter 13 bankruptcy is already a difficult one. You dont want to make it more difficult by having your bankruptcy denied by the courts.
The right counsel and representation will work with you to ensure it that doesnt happen. At Parker & DuFresne, we represent clients in the Northeast Florida area, including Jacksonville, St. Augustine, Orange Park and the beaches, and we can help safely guide you through the bankruptcy process. Contact our offices for a free consultation today.
Can I Erase My Student Loans By Filing Bankruptcy
Generally, student loans are not discharged in bankruptcy. In 11 U.S.C. sec. 523 there are two exceptions to this general rule:
Student loans more than 7 years old used to be dischargeable under certain circumstances, but this provision was removed by an appropriations bill passed in October of 1998.
Whether an exception applies depends on the facts of the particular case and may also depend on local court decisions. Even if a student loan falls into one of the two exceptions, discharge of the loan may not be automatic. You may have to file an adversary proceeding in the bankruptcy court to obtain a court order declaring the debt discharged.
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Reasons To Switch Your Bankruptcy Filing From The Previous Chapter
The type of bankruptcy you file will change your repayment plan, the amount of unsecured debts you owe, and the amount of time the bankruptcy stays on your record. It may make sense to file for a different bankruptcy than you used in your previous case.
A bankruptcy attorney can help you understand the best debt relief options for you. An attorney can’t change the time limits between filing dates, but they can help you decide if switching your Chapter is a smart idea. They can also help you prepare to file as soon as the date is available to you.
You can apply one of these strategies to your second bankruptcy filing:
- Switching from Chapter 7 to Chapter 13: If you pay off unsecured debts during Chapter 7, you can file a Chapter 13 to create a repayment plan to pay off tax debt or other debts that were not discharged during the Chapter 7 filing.
- Switching from Chapter 13 to Chapter 7: If you pay back 100% of unsecured debt to creditors, the six-year waiting period can be waived. In some cases, you only need to pay back 70% of unsecured debt. The first bankruptcy case needs to be in good faith in order to file for Chapter 7.
- Repeating Chapter 13 bankruptcy filing: Some people may repeat Chapter 13 filing to manage student loans or tax debts repayment. These debts cannot be discharged, so they must eventually be paid in full.
What To Do If You Think Time Limitations May Apply In Your Case
If you have filed bankruptcy before and feel you may need to file again, you should consult a bankruptcy attorney who can walk you through your options and help you determine your best course of action.
Most attorneys will provide a free initial consultation, said Yesner. However, you should make sure that the bankruptcy attorney you speak with also provides other non-bankruptcy solutions to prevent being forced to file when that solution may not be best or most appropriate for your finances.
Before you meet with an attorney, it can help to gather some information on your previous bankruptcy. Create a file of paperwork of earlier bankruptcies that includes information on dates and debts discharged. Also, ask yourself about your goals. Do you want to eliminate debt? Save your home? Stop creditors from calling?
If you find you cant file for bankruptcy again for several years, dont despair. Fleischman said there might be other options to consider that could leave you better off. Depending on your reason for considering bankruptcy in the first place, those alternatives may include:
- Dealing with creditors directly
- Settling debts
- Engaging in administrative remedies such as income-driven repayment on federal student loans and offer in compromise for tax debts
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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.
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.
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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.
Choose The Right Bankruptcy Filing For You
We are proud to represent our clients in four primary areas of bankruptcy relief. Called Chapters, each of these forms of bankruptcy has its own advantages and disadvantages. The four Chapters used for filing for bankruptcy, where we help clients find debt relief, include:
- Chapter 7: Straight bankruptcy, where debts are fully forgiven
- Chapter 11: Complex business bankruptcies with debt reorganizations and restructures
- Chapter 12: Debt relief and repayment plans for family farmers and family fishermen
- Chapter 13: Debt relief for income earners that can help stop foreclosures and other looming debt recovery efforts
When you decide to declare bankruptcy, your lawyer will help you choose the right Bankruptcy Chapter for your financial situation. Filing for bankruptcy is a complex, time-consuming procedure. Your lawyer can help you understand and navigate the filing process from your initial petition to final discharge.
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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.
Exceptions To Discharge From Personal Bankruptcy In Nine Months
The length of your bankruptcy will be nine months unless one or more of the following is true:
- You fail to perform all your bankruptcy duties, such as making regular payments of surplus income to the Trustee
- You have surplus income
- You have been bankrupt before
- There is an objection filed to your discharge
How much longer your bankruptcy lasts will depend on the details of your case. Twenty-one months is typical when the bankrupt individual makes a higher salary .
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The Advantages And Disadvantages Of Declaring Bankruptcy
When your debt exceeds your assets and your ability to pay your creditors, bankruptcy can offer you a financial lifeline. Filing for debt relief through bankruptcy can have many advantages and disadvantages. Advantages of bankruptcy protection include:
- A new start that can help you create a healthy financial future
- The ability to retain much, if not all, of your personal property and assets
- Your creditors will be required to cease all debt collection actions
In addition to putting a stop to relentless phone calls and other debt collection efforts, filing for debt relief through bankruptcy can also have disadvantages that you should be aware of. Disadvantages of filing for bankruptcy protection include:
- Filing for bankruptcy stays on your credit profile for 7 to 10 years
- Filing for bankruptcy can lead to higher interest rates when you are eventually able to obtain financing
- You can be ordered to undergo court-approved credit counseling
- You cannot use bankruptcy to discharge overwhelming debt, again, for at least four to eight years, depending on what type of bankruptcy you had filed.
Each individual or business debt load is unique and requires close scrutiny and careful debt reduction planning. Your lawyer can take a clear, objective, and comprehensive view of your financial situation and help you create a plan to reorganize, reduce, or eliminate your debt.
For a legal consultation, call
Multiple Bankruptcy Cases Within 12 Months
One of the many duties of a bankruptcy judge or trustee is to protect the bankruptcy courts against serial filers. Although there are no specific time frames set forth within bankruptcy law, this decision is made by the preceding judge or trustee on a case-by-case basis. Some of the more common occurrences include:
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How To File A Motion To Extend The Automatic Stay
If you want to extend the automatic stay, you must file a motion with the court. In your motion, you’ll explain why your previous bankruptcy was dismissed and why the court should extend the stay in your current case. You’ll have to prove that you filed the subsequent bankruptcy in good faith .
The specific procedures for filing a motion to extend the automatic stay depend on the rules in your jurisdiction. But the following are typically the most common steps you must take:
Find and complete the appropriate forms. Each bankruptcy district has forms for specific motions and notices. Check with your local bankruptcy court to find all paperwork related to motions to extend the automatic stay. But be aware that your jurisdiction may not have a standard form to fill out. In that case, you will have to create the motion and declarations. You can find your court’s website using the Federal Court Finder tool.
Obtain a hearing date and file the motion. In most cases, you will need to obtain a hearing date from the court before filing the motion . Keep in mind that the filer must complete the hearing before the stay expires, so typically you must file your motion immediately after filing your case. You’ll tell the court why your first bankruptcy was dismissed and explain why this case is filed in good faith. Then you’ll serve the paperwork on the bankruptcy trustee and your creditors .
You Will Be Discharged From Bankruptcy
A discharge releases you from the legal obligation to repay the debts you had as of the date you filed for bankruptcy, except for specific types of debts that are excluded by law. These include alimony and child support payments, student loans , court-ordered fines or penalties, and debts arising from fraud.
The timing of your discharge depends on a number of factors, including whether this is your first bankruptcy, and whether you are required to make surplus income payments.
Timing of your discharge from bankruptcy
If this is your first bankruptcy and you are not required to make surplus income payments , you will be eligible for an automatic discharge from bankruptcy in nine months. If your surplus income is higher, your bankruptcy will be extended to 21 months and you will be required to make payments from your surplus income.
Your discharge from bankruptcy will happen automatically if
- the discharge is not opposed by the LIT, a creditor or the Office of the Superintendent of Bankruptcy
- you have attended the mandatory financial counselling sessions and
- this is your first or second bankruptcy.
To ensure that a greater percentage of debts is repaid to creditors, the following standards set out when an automatic discharge will occur.Timing of your discharge from bankruptcy , First Bankruptcy
|Surplus income is greater than $200 per month||36 months after filing|
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