TWO, FOUR, SIX, EIGHT! A DISCHARGE YOU’LL APPRECIATE!

cheerleaderFor most consumers, filing a bankruptcy is a once-in-a-lifetime occurrence. But for others, even after being granted a discharge of debt in bankruptcy, they find themselves in that unbelievable situation of having to ask the question – if I filed for bankruptcy protection previously, can I file another bankruptcy and get my debts discharged? The answer to that question depends not only on the length of time since your previous filing, but also the type of bankruptcy you filed. For more information about the difference between Chapter 7 and Chapter 13 bankruptcy filings, click here.


FILING DATE TO FILING DATE
The first thing to figure out when measuring the time between filings is the date upon which your previous bankruptcy was filed. When reviewing this question, I normally have people start to tell me about the date the discharge order was filed, the date when they attended their court hearing, when their Chapter 13 was converted to Chapter 7, and so on. But the only date that matters is the DATE the previous bankruptcy was filed. In the case of conversions between different Chapters, ignore the conversion date and go back to when the case was filed. Disregard everything else.
Often, the case number begins with the year in which the case was filed. So if your case number is 14-XXXX, it’s a likely bet that the case was filed sometime in 2014. Retrace the steps to find out the exact date of filing.
TWO YEARS – CHAPTER 13 TO CHAPTER 13
The shortest period of time is for Chapter 13 bankruptcy filings. If you got a discharge from a Chapter 13 bankruptcy filing, then two years after the filing date, you can file another one. Perhaps Congress made this the shortest re-filing period as a “reward,” just because the consumer is re-paying debt.
But consider that in Chapter 13 you are proposing to pay your creditors back, and that not every Chapter 13 which is filed successfully completes with a discharge. The typical Chapter 13 plan lasts three to five years. A lot of things can happen during that time, and in my experience there are more bad things that happen than good.
Keep in mind that you can file a Chapter 13 in a shorter period of time than two years, you just can’t get a discharge. However, you can take advantage of the “automatic stay” provisions of the bankruptcy code. Consult with your attorney to see if there might be a situation where you would want to do this.
FOUR YEARS – CHAPTER 7 TO CHAPTER 13
If you received a discharge in a Chapter 7 bankruptcy filing, then four years after the filing date you can file a Chapter 13 bankruptcy and get a discharge. Again, if you file before the four years has run, then you can get a stay of collection activity, which can be very beneficial. Just be aware that you may have to repay all of the debts over the course of your plan.
A quick example to illustrate how this might work: a married couple gets overwhelmed with medical bills during their marriage, and file Chapter 7 to get their debt wiped out. Three years later, their situation has improved greatly and they have bought a home. However, one spouse has a recurrence of health problems, and not only misses a great deal of work, but has a new batch of medical bills to deal with. After several mortgage payments are missed, they are served with a foreclosure complaint, even though the spouse has recovered and is back at their job.
In this case, the couple cannot get a discharge of debt in Chapter 13, because it has not been four years since they filed their Chapter 7. But they can still file Chapter 13, they just have to re-pay the missed mortgage payments and all of the medical bills. The advantage is they can legally stop the foreclosure, and have up to five years to re-organize their debt, at no interest, while they stay in their home.
SIX YEARS – CHAPTER 13 TO CHAPTER 7
If a consumer has filed and successfully completed their Chapter 13, then she has to wait six years prior to filing a new Chapter 7 case IF her Chapter 13 plan paid her unsecured creditors less than 70 percent of the debt she owed. The 70 percent pay back is referred as the “dividend” paid to unsecured creditors. If her plan paid a dividend of 70 percent or more to the unsecured creditors, then she can file a Chapter 7 in sooner than six years.
EIGHT YEARS – CHAPTER 7 TO CHAPTER 7
By far, the most popular type of consumer bankruptcy is Chapter 7. This does not involve a plan to repay debt; rather, all debts subject to discharge are wiped out. This is ideal for consumers with credit card and medical debt. The debts are gone, and the consumers obligation to repay the debt has been extinguished. Some debts are not automatically dischargeable in bankruptcy, such as student loan debt, child support and alimony, and most tax debts.
Before Congress re-wrote the bankruptcy laws in 2005, they extended what had been a seven year waiting period to eight years. So if you filed a previous bankruptcy under Chapter 7, find out the filing date. (You should have kept a copy of the petition for at least eight years, it is a very important legal document you would have along with your most important personal papers. Neither your attorney nor the court can get you another copy without additional expense). Then fast forward eight years, you are eligible to file again and ask for a discharge of your debts.
I have been filing consumer bankruptcy petitions from more than sixteen years, so, yes, I have had a number of clients who filed, and then had to file again. Give me a call at 216-642-8234 if you find yourself in this situation. We will examine the problem, the relevant dates of the previous filing, and the type of bankruptcy which would best suit your needs. Then we will look at the possibility of a discharge, and whether bankruptcy is a possible solution for your current problem. Do not take action based upon what you have read here, instead, assemble your facts and contact an attorney for assistance.

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