Prior Chapter 7 Bankruptcy
If you have filed Chapter 7 bankruptcy in the past and received a discharge of your debts you are required to wait 8 years from the filing date in order to file a Chapter 7 bankruptcy again. An individual can file a Chapter 13 bankruptcy anytime after exiting a Chapter 7. However, you are required to wait 4 years after the prior Chapter 7 filing in order to receive a discharge under Chapter 13. Filing a Chapter 13 bankruptcy may benefit an individual even if they are not eligible for a discharge. For example, you may be able to pay your obligations in a more affordable payment plan, stop foreclosures and catch up on past due mortgage payments. If you have filed Chapter 7 bankruptcy before and are considering filling again, a qualified Michigan bankruptcy attorney can help guide you through the process.
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.
What Happens When Debtors File Multiple Bankruptcy Cases
While bankruptcy can help Kentucky citizens and others reorganize or eliminate debt, there are restrictions to how many times they can apply. Those who abuse the bankruptcy system egregiously may be prohibited from using it again once their cases are dismissed in some instances. Individuals who are allowed to file for bankruptcy more than once may only receive a limited automatic stay of creditor activity or none at all. Creditors may be able to contact a debtor, garnish earnings, or launch a lawsuit as a result of this.
If a stay is not automatically granted, a person may request one from a judge. It may also be possible to request an extension of a stay beyond the 30-day period following the filing of a case. A court will examine how many cases a person has filed in the previous year or several years when assessing their request. When deciding whether or not to grant or prolong a stay, he or she will look at the grounds why previous applications were dismissed.
Cases of bankruptcy can be dismissed for a variety of reasons, including failure to follow a repayment plan or a professional error. Finally, if a debtors circumstances have recently altered, an automatic stay may be imposed or prolonged.
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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.
When Is The Best Time To Delay Bankruptcy
In some circumstances, waiting for a certain period of time before you file can help you keep more money, protect the money of another person , increase your chances of qualifying for Chapter 7, and more. Here are some of the situations when it might be best to delay the filing of your bankruptcy petition.
If the court granted your first discharge under Chapter 13 bankruptcy, youd need to wait six years before filing for a Chapter 7 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.
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 is not necessarily a good idea, but it is possible.
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Consecutive Chapter 7 Bankruptcies
How often can you file consecutive Chapter 7 bankruptcies? If you received a discharge in a Chapter 7 bankruptcy, you must wait eight years. This period begins on the date the previous case was filed before another Chapter 7 can be filed. To be clear, you count the 8 years from old filing date to new filing date. You do not count from old discharge date to new filing date.
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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Attentive Service Through Your Second Bankruptcy Filing
As a Michigan bankruptcy attorney, I will work with you one-on-one, and make sure you are in full compliance with filing statutes before your petition is submitted. My firm assists individuals Sterling Heights and Warren, as well as inMadison Heights, Royal Oak andClinton Township.
I provide my clients with a very high level of service and can discuss how to proceed with a second filing during afree initial consultation.
Chapter 13 To Chapter 7
Finally, if you got a discharge in a previous Chapter 13 bankruptcy, you must wait six years from the date of the Chapter 13 to apply for and receive a discharge in a future Chapter 7. There is, however, an exception to this rule. The six-year rule does not apply if you paid back the following in Chapter 13:
- all of your unsecured debts
- at least 70% of your unsecured debts and your plan was proposed in good
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Filing For A Second Case Even If You Are Not Entitled To A Discharge
How often you can declare bankruptcy depends on the type of bankruptcy discharge that you have. But you can still file for a second case even if you were not entitled to a discharge on the previous cases that you have filed.
There are instances when filing for bankruptcy can help even if you are not eligible for a discharge. Situations such as being behind on your tax or mortgage payments allow you for an automatic stay. You can take time with a bankruptcy case to catch up on your missed debt payments. The automatic stay is applicable to everyone who wants to file for bankruptcy even if they are unable to get a discharge.
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If You’ve Filed For Bankruptcy Before You Must Wait A Number Of Years Before Wiping Out Debt In A New Case
Updated By Cara O’Neill, Attorney
If you’ve filed for bankruptcy before, you’ll have to meet certain requirements before you’ll be eligible to receive a debt dischargethe order that wipes out qualifying debt. In this article, you’ll learn how to:
- check whether enough time has elapsed to receive a debt discharge
- determine whether a court order will delay your filing further, and
- know when you’ll need to file a motion for an automatic stay orderthe order that protects you from creditor collections during the bankruptcy case.
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What Debts Cannot Be Discharged In Bankruptcy
The following debts cannot be discharged in either a Chapter 7 or a Chapter 13 bankruptcy case. If you file Chapter 7, you will still owe these debts after your case is over. If you file Chapter 13, these debts will either be paid in full during your plan, or the balance will remain at the end of your case.
Nondischargeable debts include:
- Unlisted debts, unless the creditor had knowledge of your bankruptcy filing.
- Recent income tax debt and other tax debt.
- Fines imposed for violating the law.
- Student loans, unless you can show that it will cause a hardship for you to repay them.
- Debts you owe under a divorce decree or settlement.
In a Chapter 7 and 13 case, a creditor may object, and a judge may agree, to theseadditional debts being discharged:
- Debts incurred by embezzlement, fraud, or larceny.
- Certain credit purchases made within 90 days or cash advances made within 70 days of filing.
- Restitution or damages awarded in a civil action for willful or malicious injury to a person.
How Many Times Can You File Chapter 7 Bankruptcy
How often can you file Chapter 7 in Texas? There is no limit on the number of times a person can file for Chapter 7 bankruptcy, also known as liquidation bankruptcy. However, depending on the number of times a person files for this type of bankruptcy, there is a waiting period for the discharge of debts.
Waiting Period After Bankruptcy Discharge for Chapter 7
As weve explained, the answer to the question, how many times can you declare Chapter 7 bankruptcy in Texas? is unlimited. However, relevant portions of the Federal Bankruptcy Code guide your time in the waiting room for discharging of debts between bankruptcy filings.
If any of the math seems complicated, dont worry, that is why attorneys are here to help you.
Breaking it down, a person who successfully receives a Chapter 7 Bankruptcy discharge of debts must wait eight years to receive a second Chapter 7 Bankruptcy discharge, no matter when they file their second bankruptcy action.
If the same person receives a Chapter 7 Bankruptcy discharge and files subsequently for a Chapter 13 Bankruptcy, they will only have to wait four years to receive a Chapter 13 discharge.
As you may have noticed, in any case where multiple bankruptcy filings include Chapter 13, the law goes easier on the debtor. This is because Chapter 13 bankruptcy is known as reorganization bankruptcy, and many debts are often repaid in a Chapter 13 bankruptcy, rather than discharged.
What Determines Bankruptcy Eligibility
When it comes to filing multiple bankruptcy petitions, the most important factor is time. If you had your debts dismissed in a prior bankruptcy, you will have to wait a specific length of time before being eligible for another discharge.
The ability to file another bankruptcy and get a discharge is contingent on a number of variables.
- the type of bankruptcy previously filed
- the date the previous bankruptcy was filed
- whether the previous bankruptcy was discharged, dismissed, or dismissed with prejudice
When you are eligible for another discharge, the length of time you have to wait depends on whether you previously got a Chapter 7 or Chapter 13 discharge and the kind of bankruptcy you wish to file again.
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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Filing Without Receiving A Discharge In The First Case
A debtor generally can file a second bankruptcy at any time if they did not receive a discharge in the first bankruptcy case. However, if you file two cases close together, the automatic stay may not apply to prevent creditors from collecting on your debts.
Some nuances may vary depending on whether the first case was dismissed or denied. If the case was dismissed, you can file again immediately except in some situations in which a 180-day waiting period applies. This may apply if you voluntarily dismissed the case after a creditor sought to lift the automatic stay, or if you did not follow court orders or appear in court when required. If the discharge was denied, you probably cannot get a discharge of the debts that you listed in that case if you file again.
Role Of The Case Trustee
When a chapter 7 petition is filed, the U.S. trustee appoints an impartial case trustee to administer the case and liquidate the debtor’s nonexempt assets. 11 U.S.C. §§ 701, 704. If all the debtor’s assets are exempt or subject to valid liens, the trustee will normally file a “no asset” report with the court, and there will be no distribution to unsecured creditors. Most chapter 7 cases involving individual debtors are no asset cases. But if the case appears to be an “asset” case at the outset, unsecured creditors must file their claims with the court within 90 days after the first date set for the meeting of creditors. Fed. R. Bankr. P. 3002. A governmental unit, however, has 180 days from the date the case is filed to file a claim. 11 U.S.C. § 502. In the typical no asset chapter 7 case, there is no need for creditors to file proofs of claim because there will be no distribution. If the trustee later recovers assets for distribution to unsecured creditors, the Bankruptcy Court will provide notice to creditors and will allow additional time to file proofs of claim. Although a secured creditor does not need to file a proof of claim in a chapter 7 case to preserve its security interest or lien, there may be other reasons to file a claim. A creditor in a chapter 7 case who has a lien on the debtor’s property should consult an attorney for advice.
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The Debtor Keeps Future Acquisitions
Once you have filed the Chapter 7 bankruptcy, then any property you acquire after than will not be added to the bankruptcy estate. However, this rule is only applicable if the property comes from life insurance policy proceedings, property from settlement agreement or divorce, and inherited property.
Consider A Consumer Proposal
What are your options if you have declared bankruptcy in the past, and you have new debts? To avoid the additional costs and consequences of filing bankruptcy more than once you could consider a as a way to negotiate a settlement with your creditors. You will avoid a repeat bankruptcy but still find a solution to your current financial problems.
If you find yourself facing the possibility of filing bankruptcy a second or third time, and ask them about your alternatives.
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