Bankruptcy was designed to provide filers with a fresh start. In many cases, filers obtain credit counseling and learn better financial habits, and they are able to utilize the fresh start to lead lives within their budgets. However, some filers encounter unexpected emergencies or are not able to make significant enough life changes, and they may need to file for bankruptcy another time. While there is no statutory limit to how many times a debtor may file over a lifetime, there are various timing rules that need to be followed to make filing for bankruptcy and the corresponding effect on your credit worth it. You should consult experienced Los Angeles bankruptcy lawyer Devin Sawdayi if you are considering a repeat filing.The Impact of Repeat Filings
There is no minimum time before you can file for bankruptcy again, but there are minimum time periods prescribed by law that affect whether an automatic stay will go into effect and how soon you can receive a discharge. For most people, the two main advantages of filing for bankruptcy are the automatic stay and the discharge of consumer debts. It may be a waste of time to file for bankruptcy if you are not going to receive a discharge of your dischargeable debts.
The time periods you will have to wait to receive another discharge are different depending on which type of bankruptcy you file each time. For successive Chapter 7 cases, you have to wait eight years from the date your first bankruptcy was filed. If you file too soon, you will not receive a discharge. However, if you want to file a Chapter 13 bankruptcy case, you must wait four years from the date that the initial Chapter 7 case was filed.
For successive Chapter 13 cases, no discharge will be given if your next case is filed within two years from the filing date of the first case. If you want to file a Chapter 7 case after first filing a Chapter 13 case, you must wait six years from the date you filed your Chapter 13 case. Your debts will not be discharged for a Chapter 7 case filed within six years from the date of the Chapter 13 case being filed. However, there are exceptions. If you paid all your unsecured creditors in full, or you paid 70% of all the creditors' claims in Chapter 13 and the plan proposed was in good faith and your best effort, you may be able to receive a Chapter 7 discharge earlier.
If you file for bankruptcy within a year of filing a first case, the automatic stay in the second case will only last 30 days unless the court agrees to extend it. If you had two cases pending before the court in the year before your current filing, there will be no automatic stay. While your bankruptcy estate remains protected, this means, for example, that a creditor can still garnish wages earned after you filed, since they are not yet part of the estate.
Since the timing is based on limiting the number of times you get a fresh start, you can usually file for bankruptcy again if you did not receive a discharge in the first case. For example, if the court does not order otherwise because you failed to appear or failed to obey a court order, you can file again within a shorter window of time if you did not receive a discharge in the first case. However, it is presumed that a new filing is in bad faith, and the automatic stay will terminate after 30 days of filing, if you had a bankruptcy pending and dismissed in the previous year. You can ask the court to continue the stay, but you will have to show that the new case is not in bad faith.Consult a Los Angeles Lawyer for a Bankruptcy Proceeding
Navigating the bankruptcy procedure can be challenging for a layperson. As a result, debtors who do not retain an attorney may not be able to take advantage of the process to the fullest extent. Los Angeles bankruptcy attorney Devin Sawdayi can help individuals file for Chapter 7 or Chapter 13 and guide them through the complexities that may develop. Contact us at 310-475-9399 or via our online form to set up a free consultation.