When you file for bankruptcy for the first time and receive a discharge, then you have to wait for a specified period (as set by Bankruptcy Code) before you can receive a discharge again.
If your case was dismissed without entry of a discharge, you can file another bankruptcy but there may be limitations placed on the filing, especially if your case was dismissed within the year preceding your second filing.
For example, if you have had a case dismissed within the last year, the automatic stay only remains in effect in your second filing for one month, unless you get this extended by Order of the Court.
If you have had two (2) cases dismissed within the year preceding a third filing, the automatic stay does not go into effect at all at the beginning of the case, and you have to seek approval from the Court to “impose” the automatic stay, or in other words put it into effect.
This is important because the automatic stay prevents creditors from taking action against you such as a garnishment, foreclosure or repossession. Normally this stay goes into effect “automatically” when a bankruptcy is filed, hence the name.
However, if the automatic stay does not go into effect or expires because of a prior bankruptcy dismissal, your bankruptcy will not prevent such creditor action.
With respect to discharge eligibility, you can file for Bankruptcy twice or even three times and get a discharge every time, provided you remain patient and wait for a certain period before filing again.
Filing bankruptcy before the waiting period will prevent you from receiving a discharge and you will still be liable for payment of debts.
Filing for Bankruptcy Twice:
Chapter 7 Followed by a Chapter 7:
You are free to file a Second Bankruptcy under Chapter 7 even if you received a discharge in your previous case. If you wait long enough, you are also entitled to receive a discharge again.
After you have received a discharge in your first Bankruptcy Filing Under Chapter 7, you have to wait for eight (8) years before you file for Bankruptcy again under the same Chapter. For example, if you file for Bankruptcy Under Chapter 7 on May 8, 2019, then you will be eligible for a discharge if you file a second Bankruptcy after May 8, 2027.
Filing prior to that the date would make you ineligible to get a discharge and you will be legally responsible for clearing your debts.
Chapter 7 Followed by a Chapter 13:
If you have previously filed for Chapter 7 Bankruptcy and received a discharge, then you need to wait for four (4) years if you want to receive a discharge in a Chapter 13 Bankruptcy.
If you wait for four (4) years, than you can obtain a discharge for your Medical Bills, Personal Loans and Credit Card Bills, among other debts.
Filing Chapter 13 Bankruptcy before the four (4) years will not cover your Unsecured Debts.
That means if you filed Chapter 7 Bankruptcy on May 4, 2019 and received a Discharge, then you have to file for Chapter 13 after May 4, 2023 in order to receive a discharge in that case.
However, the 4-year timeline is only applicable when you obtain a discharge in your last Chapter 7 Bankruptcy filing.
Chapter 13 Followed by a Chapter 13:
If you have filed a Chapter 13 and received a discharge, you have to wait at least two (2) years to file Chapter 13 Bankruptcy Again and receive a discharge. Most cases take between three (3) and five (5) years, so practically, you can immediately file a new Bankruptcy under Chapter 13 as soon as you obtain a discharge in such cases.
Chapter 13 Followed by a Chapter 7:
If you have previously filed Chapter 13 Bankruptcy and received a discharge, than you need to wait six (6) years from the date of filing your last Bankruptcy before filing Chapter 7 Bankruptcy. Otherwise, you will not receive a discharge in the Chapter 7 case unless you meet certain conditions.
If you want to file Chapter 7 Bankruptcy (and receive a discharge) before six (6) years, the following must occur.
- You must have paid 100% of allowed unsecured claims in your prior Chapter 13 Bankruptcy; or
- You must have paid 70% of allowed unsecured claims during your Previous Bankruptcy Filing under Chapter 13 and the Court must determine that you made your best effort and proposed your plan in good faith in the prior Chapter 13 Bankruptcy.
It is crucial to understand the details about your previous bankruptcy filing and how it affects your ability to receive a discharge in your upcoming bankruptcy case.
It is also important to understand the impact a prior bankruptcy dismissal can have on the automatic stay, because it is the automatic stay that prevents creditors from taking action against you such as a garnishment, foreclosure or repossession.
Filing a second bankruptcy case is as critical as filing for a first case, and it requires the wits and keenness of an experienced Bankruptcy Attorney. A professional Attorney dealing with Chapter 7 and Chapter 13 deeply analyzes your last Bankruptcy Case and informs you if a full discharge of debts is obtainable or not.
If you are not sure about your eligibility regarding a second Bankruptcy Filing, then please contact us for a free consultation.