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How Many Times Can I File for Bankruptcy?

How Many Times Can I File for Bankruptcy?

Filing for bankruptcy is a difficult process for anyone. It’s a frustrating financial situation no person wants to find themselves in.  While certainly not enjoyable, there are still cases where filing for bankruptcy is the best and, sometimes, the only solution to the significant debt you are unable to repay.  More serious situations, such as having your house foreclosed, could be fixed by first filing for bankruptcy.  Nikolaus & Hohenadel has helped many clients from Lancaster, PA and the surrounding areas get through the bankruptcy process.  While nobody wants to have to file for bankruptcy more than once, some of you may be asking whether or not it is even possible.  We are going to take some time to answer that question today.  We are going to start by learning a little bit about the bankruptcy process.

Types of bankruptcy

There are five different types of bankruptcies one can file for related to various situations. The most common types, though, are Chapter 7 and Chapter 13 bankruptcy, which apply to individuals.

In Chapter 7, the individual that files will have a court-appointed trusted assigned to their case to review the individual’s property and income, and determine whether any of the debtor’s assets should be liquidated to pay back some of the debtor’s creditors. Some of the most commonly sold items include cars, excessive bank funds or stocks, and other property deemed more valuable.

Chapter 13 is a different situation: the individual will instead be required to follow a plan approved by the court that details a repayment plan for their various debts. The plan can last for up to five years.

When do you file for bankruptcy?

Filing for bankruptcy should be your last option when you find yourself in debt. You can file for bankruptcy if you owe more money than you are able to pay back. However, it is not recommended to file unless you owe a significant amount of debt.

After you’ve filed for bankruptcy, you will be waiting for a discharge, which will wipe certain debt you had prior to filing bankruptcy. Before you’re eligible for a discharge, however, you are required to take a debtor education course. This is intended to help those who file learn how to manage their money more efficiently and avoid bankruptcy or other financial hardships in the future.

When you file for bankruptcy, you can expect it to have some repercussions. Your credit report will be impacted, and you may be denied certain loans such as a mortgage or car loan. Usually, individuals do not have a difficult time obtaining a new credit card after the bankruptcy, but the interest rate is usually higher.

How many times are you allowed to file for bankruptcy?

The time between filing is based on the date you file, not the date you receive your discharge. A bankruptcy attorney can help you understand these timelines and how they relate to you if you find yourself in this situation.

If you are filing for Chapter 7 bankruptcy, and have filed for Chapter 7 bankruptcy in the past, you must wait eight years between filing times. If you try to file for bankruptcy again before eight years have passed, your case will be denied and you will be responsible for your debt.

If you were previously in a Chapter 13 bankruptcy and your case was dismissed, you can file again but it may require you to file a petition with the Court requesting that the Bankruptcy Code’s automatic stay (which stops your creditors from taking actions against you) remain in effect during your bankruptcy.

Though the timing is the largest stipulation in filing more than once, there are other situations where you may be denied a second filing. Instances where someone who takes advantage of the bankruptcy process will be denied in court. If you continue to file bankruptcy and your cases are dismissed, the Court may impose a bar, preventing you from filing additional bankruptcy cases. To ensure you file correctly, be sure to work with an experienced bankruptcy lawyer.

Filing for bankruptcy is never a good situation, but it can be helpful for certain individuals who find themselves in a significant amount of debt they are unable to pay off. Because this largely varies from one individual to another, consider consulting with an experienced bankruptcy attorney to help you decide if it’s the right choice for you.  If you decide to file for bankruptcy, be sure to work with a bankruptcy lawyer throughout to ensure you are fulfilling all necessary requirements.  If you are in Lancaster PA and need help figuring out whether or not bankruptcy is right for you, contact us today to see how we can help!