Multiple Bankruptcy Filings: When Can You File Again?
Clients who file for bankruptcy and have a successful discharge may find themselves in a situation where they need to file for bankruptcy again. However, there are different rules and regulations to consider when filing for Chapter 7 or Chapter 13 Bankruptcy a second time. While most people are aware that there is a time limit on being able to file a bankruptcy after a successful discharge, many are unaware of the details.
Discharge time limits
Technically speaking, there is no time limit on when a person may file for an additional bankruptcy. Bankruptcy law does not set any minimum time that a person has to wait before they are able to once again file for bankruptcy. However, there are time limits on the ability to receive a discharge, the primary purpose of filing a bankruptcy, in a subsequent filing.
If the person has already received a discharge in a prior bankruptcy and files a bankruptcy too soon, the court will not allow them to receive another discharge. Generally speaking, this makes the second bankruptcy filing a waste of time and money. Thus, it is important to know what the time frames are in order to receive a second discharge, through a second bankruptcy filing.
Multiple Chapter 13 Bankruptcy filings: When can you file again?
In a Chapter 13 Bankruptcy filing, following a previous discharge of a Chapter 13 Bankruptcy, the law prevents a person from filing a second Chapter 13, and receiving a discharge, within two years of the date from filing the first one. After two years, and before six years, there is always the potential that the court will reject the discharge anyway.
In most cases, it is reasonable to expect the court to look at the second bankruptcy filings with a fine tooth comb. This is especially true in the case of a Chapter 13 Bankruptcy, which is for re-organizational purposes.
When can you file again? Multiple Chapter 7 Bankruptcy filings
Chapter 7 makes it much more simple. The courts simply do not allow a second Chapter 7 discharge to be issued on a case that is filed within eight years from the date of the prior filing.
One then the other
One option that people who need multiple bankruptcy filings can pursue for is to file a Chapter 7 Bankruptcy. In other cases, people can convert a second Chapter 13 filing where the discharge has been declined into a Chapter 7 Bankruptcy. There are a number of rules that one must adhere to in order for the court to consider giving a Chapter 7 discharge. These rules are especially prominent in a converted Chapter 13 case which stems from a second or multiple bankruptcy discharge requests.
The most important rule is that there is a six year waiting period from the filing date of the first bankruptcy case and the second case unless the following criteria are met:
- All unsecured creditors were paid in full under the terms of the Chapter 13 payment plan, or
- 70% of the claims in the Chapter 13 bankruptcy was paid, and the plan proposed in this bankruptcy was made in good faith as the best effort on the part of the filer.
For more detailed answers on multiple bankruptcies, it is advised to give us a call and schedule an appointment to go over your particular case in detail.
Note: This is for information only and does not constitute legal advice.