Can I File Bankruptcy More Than Once?
Job loss, medical bills, economic downturns and other unforeseen events are common reasons Americans struggle with debt. The bankruptcy process exists to provide individuals and businesses struggling with debt a fresh start. 413,616 individuals and businesses took advantage of this process in 2021. What happens if they need help again? Can you file more than once?
What Is Bankruptcy?
Bankruptcy is a legal process that allows individuals and businesses to eliminate or make a plan to repay some types of debts. There are several types, with Chapter 7 and Chapter 13 being the most common.
When debtors file for Chapter 7 relief, the court may eliminate all of their eligible debts. The court may also order the sale of non-exempt assets and use the proceeds to pay creditors.
With Chapter 13, instead of eliminating eligible debts, debtors create a repayment plan for all or a portion of their debts. Chapter 13 does not eliminate debts, but it stops collection efforts during the repayment period and provides debtors with a chance to prevent the loss of some types of property used to secure debts, such as a home with a delinquent mortgage.
How Many Times Can You File Bankruptcy?
There are no limits on the number of times you can file. However, there is a waiting period.
Chapter 7 Waiting Period
If you received a discharge as a result of a Chapter 7 filing, you must wait at least four years from your Chapter 7 filing date before you can file for Chapter 13 and eight years before you file for another Chapter 7.
Chapter 13 Waiting Period
The usual waiting period for Chapter 13 is six years, but the court may waive this period if you completed your repayment plan or have paid at least 70% of your debts and demonstrated a good-faith effort to pay all of your debts. If the court agrees to waive the waiting period, you may file for Chapter 7 one year after your Chapter 13 filing date.
The minimum waiting period for a second Chapter 13 filing is two years. However, because the repayment period for Chapter 13 bankruptcy is usually at least three years, most people do not file a second Chapter 13 that quickly.
If the court decides that you are repeatedly filing to delay or frustrate your creditors, it may not allow you to file. When this happens, a judge may dismiss your case and bar you from filing again for one year.
Can You File Again After a Dismissal?
Dismissal is when the court stops your case and does not discharge your debts. A judge may dismiss your case for one of several reasons:
- Your request
- Failure to meet the means test
- Failure to pay fees, make your Chapter 13 payments or file the correct paperwork
- Not attending your meeting of creditors
If the court dismissed your case, you can file bankruptcy again without a waiting period, unless the court has restricted when you can file again. For example, the judge may require you to complete a credit counseling course within 180 days before you can file again or may bar you from filing for a specific amount of time if the court believes you are attempting to game the system in some way. However, you will not have the same protection from creditors as for a first-time filing.
Restrictions on the Automatic Stay
Normally, when you file, creditors can not pursue collection activity while the court is processing your case. However, if you file within a year of having a previous case dismissed, the automatic stay expires after 30 days, and if you have had two or more cases dismissed within the past year, you will not get any stay at all. This rule exists to prevent people from repeatedly filing cases and having them dismissed with the sole intent of preventing collection activity. However, the judge may agree to extend the stay if you can prove you filed the case in good faith.
What Is Double Filing?
Double filing, which you may also hear people call a Chapter 20 bankruptcy, is a slang term for filing a Chapter 13 case as soon as you can after a Chapter 7. Some people may choose to do this to reduce their total debt to below the threshold for filing a Chapter 13 or give themselves more time to catch up on payments for secured debts.
Do You Need a Denver Bankruptcy Attorney To File?
You can file without an attorney; however, it is not recommended by most experts. If you misunderstand the law, fill out your paperwork incorrectly, miss deadlines or make other mistakes, the court could dismiss your case without discharging your debts. An experienced attorney can help you in several ways:
- Advise you on whether to file and which chapter
- Explain which debts you can discharge
- Identify which property you can keep
- Explain the law and help you file forms
- Provide tax advice
If you decide to file on your own, you can obtain the required forms online, though some courts require you to complete local forms that you may need to get from your local court or its website.
Non-Attorney Petition Preparer
If you decide to file without an attorney, you may be able to get help completing your forms from a non-attorney petition preparer. However, this person can only enter information into forms and cannot provide you with any legal advice, sign documents on your behalf or accept payment for court fees.
What Are Tips for Filing a Second Bankruptcy?
If you are considering filing for a second time, these tips may help:
- Explore your alternatives first.
- Research the consequences.
- Make sure you are filing the right type.
- Ensure you have met the required waiting period.
- Consider consulting with a Denver bankruptcy attorney.
Whether you have filed before or this is your first time, the experienced attorneys at Colorado Bankruptcy Law Group, LLC, can help you understand your options and make sure you have protection for your legal rights. Contact us today to schedule your free, confidential consultation.