Filing bankruptcy is a difficult decision, but sometimes life dictates choices to us. Financial disaster can blind-side any of us, like a job loss or medical catastrophe. Whatever the reason, individuals occasionally need the protections of the federal bankruptcy laws a second time.
An individual can ordinarily file a bankruptcy case at anytime, however there may be restrictions on the relief that is available. The most common restriction is the eligibility to receive a bankruptcy discharge. To receive a Chapter 7 discharge, you must file your case eight (8) years after your previous Chapter 7 case was filed, or six (6) years after your Chapter 13 case was filed. To receive a Chapter 13 discharge, you must file your case four (4) years after your previous Chapter 7 case was filed, or two (2) years after your Chapter 13 case was filed.
In some cases, receiving a bankruptcy discharge may not be important to the debtor. For instance, if a debtor has a non-dischargeable debt like child support or taxes that must be paid, bankruptcy can offer an organized process for payment while the debtor retains some control.
Another less common restriction concerns the automatic stay. If your bankruptcy case is dismissed within the past year, the bankruptcy court assumes that your second bankruptcy is filed in bad faith. The automatic stay will only apply for 30 days after your second filing. A hearing is required to extend the automatic stay and you must convince the court that you have filed in “good faith.” If you file two or more cases within the past years, you must petition the bankruptcy court for a stay – it is not automatic for any period of time.
Finally, you are not eligible to file at all if your case was dismissed by the bankruptcy court within 180 days due to a willful failure to obey an order of the bankruptcy court, or if your case was voluntarily dismissed after a creditor sought to lift the automatic stay to enforce a lien against your property.
Filing a second bankruptcy is not uncommon. Congress has established a few additional rules to deter abusive serial filers, but bankruptcy protection is available for the honest yet unfortunate debtor. If you need assistance with filing a second bankruptcy case, contact the experienced bankruptcy attorneys at Haines and Krieger and get the relief you need.