A common question that people ask is: can I file for bankruptcy again? Many people may assume that filing bankruptcy a second time is impossible or that obtaining relief in bankruptcy more than once cannot be done. It pays not to make assumptions. The rules can be complicated, however.
Multiple Bankruptcy Filings: When May I File Again?
People who have filed for bankruptcy relief from debt once sometimes find themselves in a position in which they need bankruptcy relief again to get additional financial protection. Filing a new case too close in time to the filing of a prior case, however, may prevent a new discharge from being obtained. A “discharge” means an order declaring the bankruptcy petitioner is discharged from the debt for which the petitioner (the debtor) seeks relief.
If a debtor filed a prior bankruptcy case and received a discharge in that case, then the limitation on filing is determined from the filing date of the prior case. Contrary to popular belief, a debtor can file a new case at any time, but he/she cannot receive a discharge unless the time period between filings complies with the time frames established in the Bankruptcy Code.
The rules vary depending on the chapter of the Bankruptcy Code under which the first relief was obtained. The general rule on when a discharge under a new case can be obtained after receiving a discharge in a prior case is as simple as remembering the sequence of 2-4-6-8.
- 2 years from prior Ch. 13 to new Ch. 13
- 4 years from prior Ch. 7 to new Ch. 13
- 6 years from prior Ch. 13 to new Ch. 7
- 8 years from prior Ch. 7 to new Ch. 7
All of the time periods run from the filing date of the first case to the filing date of the second case. If the first case was converted (i.e., meaning it was filed under one chapter but changed to another chapter), the filing date does not change. The conversion just changes the type of discharge that the debtor receives.
May a Second Filing be Beneficial Even Without a Discharge?
In some circumstances, a person might benefit from filing a Chapter 13 case immediately after getting a Chapter 7 discharge even though a Chapter 13 discharge cannot be obtained so close to the prior discharge. This technique is commonly referred to as a “Chapter 20 bankruptcy”. The refiling allows a person to obtain the protection of the bankruptcy court while paying a debt (such as unpaid taxes) through a Chapter 13 repayment plan. Whether any benefit can be obtained from such a filing depends on the personal circumstances. One should consult an experienced bankruptcy lawyer for advice to determine whether any benefit can be obtained from a so-called Chapter 20 Bankruptcy.
What If a Discharge was not Obtained in the First Case?
If a discharge was not obtained in the first bankruptcy case, in most cases, a person can file for bankruptcy relief again without any limitation on the second discharge. Doing so, however, depends on the exact disposition in the prior case. An experienced bankruptcy attorney should be able to determine if you might obtain a discharge based on the disposition of your case.
What if the Prior Bankruptcy Case Was Dismissed by the Court
If the bankruptcy case that was previously filed was dismissed, a person can file again for bankruptcy relief unless otherwise ordered by the Court. A waiting period of 180 days may apply if the prior case was dismissed for failure to obey a court order, failure to appear in the case, or if the case was voluntarily dismissed after a creditor filed a motion for relief from the automatic stay in bankruptcy. As for the automatic stay, however, different rules may apply, depending on the stay order.
What if Discharge Was Denied in the Prior Case
If the discharge being sought in the prior case was denied, a person may be able to file again and obtain relief, but the relief will probably not include a discharge of the debts from the first case. This is another special circumstance a person would be wise to seek the advice of an experienced bankruptcy lawyer.
The rules on multiple bankruptcy filings can be complicated, people should not assume that relief is impossible. Take your question to an experienced bankruptcy attorney who can review your specific circumstances and answer the question for you. You might be pleasantly surprised with the answer. Even if you do not get the answer you want, you will be armed with the information you need to make the decisions that are important for you.
- Lawrence W. Lobb
- Drendel & Jansons Law Group
- 111 Flinn Street
- Batavia, IL 60510
- (630) 406-5440
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If you filed for bankruptcy once, and are thinking you need help again, please contact us.