We get many calls from prospective and previous clients confused about their options to refile for bankruptcy following the discharge or dismissal of a prior case. The common questions are:
How many times can I file for bankruptcy?
My case was successfully discharged but I need help again, what can I do?
Is there a certain period of time that I have to wait before I can file again?
Will I be penalized for re-filing?
Have the laws changed since last time I filed?
It can be complicated and unfortunately we have found that some attorneys are actually misinformed themselves about what the rules are for re-filing a Chapter 7 or Chapter 13 bankruptcy.
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Rules for Re-filing Bankruptcy
Refiling a Chapter 13 Bankruptcy or Filing a Chapter 13 after a Chapter 7 Discharge
You can refile a Chapter 13 at any time as long as you meet the income requirements and were not previously barred by the court (this is very rare). By refiling a case, you have full court protection from your creditors, including home foreclosure, vehicle repossession, judgments and garnishments, etc). Depending on the timing of your last case, we may need to take an additional step to ensure that this protection continues. We do this by drafting and filing a Motion to Extend Stay.
The main difference when filing a Chapter 13 after a Chapter 7 or refiling a Chapter 13 case is eligibility for a court discharge of debt. A discharge allows you to legally eliminate any unpaid portions of your unsecured debt obligations (such as credit cards, medical bills, personal loans, loan deficiency debt, etc). The timing rules for obtaining a court discharge are:
4 years after the filing date of a Chapter 7 bankruptcy you are eligible to receive a discharge if you file a Chapter 13 debt consolidation plan.
2 years after filing a Chapter 13 bankruptcy.
Again, even if you are not eligible for a discharge based on a previous case filing, you can still file and benefit from full court protection and reduced debt payments for the plan duration.
Refiling a Chapter 7 Bankruptcy
You can file a Chapter 7 bankruptcy every 8 years from the date of your previous Chapter 7 filing date. You would need to ensure you still qualified to file based on other factors such as:
- Total household income;
- Equity and assets in your personal and real property;
Time Period Between Bankruptcy Discharges
|Prior (First) Case:
|Current Type of Case/Chapter
||Years Until Next Available Discharge
| Chapter 7
6 years, unless the plan in the prior case paid 70% or more to unsecured creditors
| Chapter 13
Filing Dates Control: All time periods start and end on the bankruptcy petition filing date for each case, except for cases converted from one chap ter to another. The discharge date is always irrelevant.
Consecutive Chapter 7 Bankruptcy Cases:
If the debtor receives a Chapter 7 discharge in the first case, he/she will not be able to receive a discharge in a subsequently filed Chapter 7 case unless at least 8 years pass between the filing of the bankruptcy petition in the first and second case.
Consecutive Chapter 13 Bankruptcy Cases:
If the debtor receives a Chapter 13 discharge in the first case, he/she will not be able to receive a discharge in a subsequently filed Chapter 13 case unless at least 2 years pass between the filing of the bankruptcy petition in the first and second case.
Chapter 7 Followed by a Chapter 13:
If the debtor receives a Chapter 7 discharge in the first case, and the second case is a Chapter 13 case, he/she will not be able to receive a discharge in the Chapter 13 case unless at least 4 years pass between the filing of the bankruptcy petition in the first and second case.
Chapter 13 Followed by Chapter 7:
If the debtor receives a Chapter 13 discharge in the first case, and the second case is a Chapter 7 case, he/she will not be able to receive a discharge in the Chapter 7 case unless at least 6 years pass between the filing date of the bankruptcy petition in the first and second case.
Reasons for Re-Filing
- Previous Chapter 7 filing: They successfully discharged from a Chapter 7 bankruptcy and need debt relief and court protection once again, but do not qualify to refile a Chapter 7 based on discharge timing or other qualifications. You can file a Chapter 13 bankruptcy immediately after a Chapter 7 discharge or dismissal. You are eligible for a Chapter 13 discharge of debts if it has been over 4 years from the date of your previous Chapter 7 filing.
- Discharge:Their previous case was successfully discharged but they now need help again with their debts and/or protection from their creditors. This could be due to:
- Change in circumstances, such as an temporary loss of income, under-employment or a lawsuit.
- Prior case did not or could not address all debt resolution goals. Refiling a bankruptcy is a viable option complete all these efforts.
- Dismissal: The main reason for a Chapter 13 case to get dismissed is due to chronically missed plan payments, failure to appear at the mandatory 341 court hearing (without notice or a valid reason) or missing documentation required by the Trustee or court (such as copies of tax returns, pay stubs, etc.)
If you are facing a dismissal of your case, your attorney should be there to support you in this process. Examples of steps our firm takes to ensure a discharge and avoid dismissals are:
- Annual case reviews to review payment history and monitor any changes in circumstances that might warrant a medication of the Chapter 13 plan.
- Reminder calls and letters to client before all required hearings. If clients have a valid reason for missing a hearing, we promptly file an affidavit with the court to reschedule the hearing.
If you re-file within one year, your attorney is required to file a motion petitioning the court to extend your court protection (the "automatic stay" protection) from creditors (foreclosure, etc.) beyond a 30 day period. The purpose of the "Motion to Extend the Automatic Stay" is to demonstrate that your new case is filed in good faith. Motions need to be filed on time and supported by an affidavit by the debtor (drafted by experienced attorney) explaining the circumstances and why the new case presents a better opportunity to succeed.
There are certain circumstances that can bar a re-filing when a debtor voluntarily dismisses his or her prior case. Further, a bankruptcy judge can enter an order barring the re-filing of a case if the judge determines that the filer was abusing the system to hinder or delay creditors versus using it as a tool to reorganize their debts. These orders are rare but a client's eligibility to re-file will always be confirmed when meeting with our attorneys.
For all of these reasons, it is essential to work with an experienced law firm to refile a case.
You are eligible to file a Chapter 7 every eight years. The clock is reset from the time your case is filed, not discharged. The court does not require you to narrate or explain your reasons for needing to re-file. If you did not receive a discharge (i.e., case was dismissed) after filing a prior Chapter 7, you may be eligible to re-filing a subsequent Chapter 7 and obtain a discharge, depending on the circumstances surrounding your prior dismissal.
If you filed a Chapter 7 and obtained a discharge, but fell into subsequent financial hardship within those eight years, you can file a Chapter 13 at any time. This would provide you with:
- Legal protection from your creditors (collections, home foreclosure, vehicle repossession, etc
- Court-approved repayment plan
- Opportunity to remove a second mortgage on your home
- Ability to improve your credit throughout the repayment process.
If you file the Chapter 13 at least four years after the Chapter 7 filing, you can eliminate a portion if not the majority of your unsecured debt obligations (credit cards, medical bills, etc) as well as your second mortgage and received a court discharge from those debts. If you did not reaffirm your second mortgage when you filed your Chapter 7, you may be able to remove the second mortgage from the property with the use of a Chapter 13 whether it has been 4 years since the Chapter 7 or not.
Get Help from Acclaim Legal Services
As you can see, there are many reasons why re-filing a bankruptcy may be necessary and beneficial. Further, there are several variables and nuances that dictate when and what protections can be established by a re-filed bankruptcy.
Contacting an experienced bankruptcy attorney should be your first step in the process of exploring your options to refile for bankruptcy. We offer free same-day bankruptcy evaluations.
Please call us toll free at 866-261-82822 or schedule a consultation right now.