Many people struggling with debt consider bankruptcy. However, even after filing for bankruptcy and receiving a discharge of their consumer debts, some debtors struggle to stay afloat. Although you can file for bankruptcy often, there are time limits to often you may file if you want to discharge your debts. Since the usual purpose of filing for bankruptcy is discharging your debts, you should be aware of whether filing a particular petition is likely to result in a discharge of your debts or whether there are any other circumstances that might make it appropriate to file again. The timing of repeat filings is crucial. At Grainger Legal Services, an Alabama bankruptcy attorney can counsel you on whether a repeat filing may be appropriate in your circumstances.
There are minimum time periods you must wait in order to get two of the major benefits of filing for bankruptcy: the automatic stay and a bankruptcy discharge. For most people, the purpose of Chapter 7 or Chapter 13 bankruptcy is to receive a discharge, which wipes out all of your dischargeable debts. There are certain debts that cannot be discharged, but for most consumers, a discharge can be very helpful and allow them to start over with a clean slate. There are also instances when it is helpful to file for bankruptcy even though a discharge is not possible.
The amount of time you need to wait to receive a discharge varies depending on which type of bankruptcy you filed before, and which type you want to file now. To receive a discharge in a Chapter 7 bankruptcy after already receiving a Chapter 7 discharge, you need to wait eight years. The eight years runs from the date you filed the first Chapter 7 petition. If you file the repeat filing too soon, you will not get a discharge. If you want to file a Chapter 13 bankruptcy case and receive a discharge after first filing a Chapter 7 and receiving a discharge, you must wait four years.
If you received a discharge in a Chapter 13 case, you will not be able to receive a second Chapter 13 discharge if your repeat filing occurs within two years from the first filing. In most cases, however, you cannot receive a discharge in a Chapter 13 case until you have completed a debt repayment plan, which is usually structured to take 3-5 years. To receive a Chapter 7 discharge after already receiving a Chapter 13 discharge, you must file the Chapter 7 case more than six years after the date of your Chapter 13 filing. However, if you paid all your unsecured creditors in full in the Chapter 13 case, or you paid 70% of your creditors’ claims in Chapter 13, and the court finds that the plan proposed was in good faith and you gave your best effort, you might be able to receive an earlier Chapter 7 discharge.
There are certain time limits that apply to receiving an automatic stay of creditors’ efforts to collect your debts. An automatic stay in a second case filed within a year of filing the first case will last only 30 days unless the court agrees it should be longer. If you file twice in one year, there will be no automatic stay for the third filing. This means that a creditor can continue to try to collect debts when you file for the third time in one year.
There are other consequences to repeat filings. In some rare circumstances, you may want to buy some time and use the structure of Chapter 13 bankruptcy in order to repay your debts. It could make sense to file a second time within a shortened window, even if you will not get a discharge. At Grainger Legal Services, an Alabama bankruptcy lawyer can advise you on a repeat filing in your particular case. We can represent debtors from offices in Prattville, Montgomery, and Troy. Call us at (334) 260-0500 or contact us online to schedule a free consultation with a debt relief attorney.