Some debtors find that they fall victim to the 1-2 punch. They have emerged from bankruptcy with a fresh start only to have another disappointment or tragedy to befall them. It may be the sudden death of a loved one, the loss of a job or a major medical event. In any case, bankruptcy is always an option. The question is not whether you can file, but under what chapter you can file and whether you’ll receive a discharge at the end. Here are the basic rules according to which type of case you are now looking to file.
Filing a Chapter 7 Case
If you received a discharge in the first Chapter 7 case, you have to wait eight years from the filing date before you can file another bankruptcy under Chapter 7. If this applies to you, you will have to consider filing under Chapter 13.
If you received a discharge in a prior Chapter 13 case, the time limit depends on whether you paid back more than 70% of your unsecured debt in the prior case. If you did, there is no waiting period. If you did not, you have to wait six years after the filing of the prior case.
If you did not receive a discharge, there is no waiting period. You can file at any time (assuming you still qualify under the income guidelines or the means test).
Filing a Chapter 13 Case
If you received a discharge in a prior chapter 7 case, you can file under chapter 13 case at any time. However, if you file the 13 within 4 years of the date you filed the 7, you will not receive a discharge. (Some do this anyway to catch up on a mortgage arrearage.)
If you received a discharge in a prior Chapter 13 case, there is a 2-year waiting period — but since nearly every 13 takes longer than 2 years to complete, this rule rarely applies.
As with filing under Chapter 7, there is no waiting period if you did not receive a discharge in the prior case.
Benefits of Filing Another Bankruptcy
If you previously filed for bankruptcy, will filing again can help you? Yes — there are many benefits to filing a second or subsequent bankruptcy.
If you have accrued additional debt that is dischargeable, that debt may again be discharged by a Chapter 7 bankruptcy. A Chapter 13 can roll it into a manageable payment plan or allow you to discharge when your payment plan is complete.
Many creditors will work with you on payment options once you file bankruptcy. Thus, if you file, your attorney may be able to renegotiate the terms of your mortgage, car loan, or other debt while your case is pending.
Filing bankruptcy can also buy you time to catch up on payments. If someone has filed a legal case against you, then you may want to seek another automatic stay. The automatic stay will stop or pause legal actions against you. In this time, you can gather the resources to pay off or significantly reduce debt on your past due payments.
What If You Didn’t Receive a Discharge in Your First Bankruptcy?
When you file for bankruptcy, the ultimate goal is usually to obtain a discharge of all eligible debts. However, if you didn’t obtain a discharge, you may have different options upon filing a new bankruptcy case.
If your first case was dismissed and you didn’t get a discharge, you may have a 180-day waiting period before you can refile a new bankruptcy. This may happen if you failed to appear in court or if you disobeyed the court.
If the court specifically denied your discharge, you can file a subsequent bankruptcy, but that same debt will not likely be discharged upon a second filing. The judge will review the reasoning of the previous situation, and will likely exclude debts listed and not discharged in your first case.
Contact a Bankruptcy Attorney for Help
For answers to questions like “How often can you file bankruptcy?” and “How often can you receive a discharge?” speak to a Cleveland OH bankruptcy attorney today. We can answer your questions and inform you of your options. Call Benson Law Firm today.