How Often Can I File for Bankruptcy?

Posted by Terry Goddard | Apr 01, 2014 | 0 Comments

This is generally not the type of question you want to be asking yourself.  With that said, there are times when you have no real choice and need to file for bankruptcy protection again.  There are other times, which I will discuss at the end of this post, when it makes strategic sense to file multiple bankruptcies.  There are two things to keep in mind in this discussion; the first is whether you received a discharge in your previous case.  If you did not receive a discharge the rules are slightly different.  The second issue is that the limitations discussed in this post relate to the filing date and generally not the discharge date.  For the most part, the discharge date has little to do with when you can file another case.

In general, under Section 727(a)(8) of the Bankruptcy Code, you may only get a Chapter 7 discharge every 8 years.  Again, this 8 year time frame runs from the date you originally filed your first case, often referred to as the order of relief.  In addition, this assumes you received a discharge in your case.  If you did not receive a discharge in your case different rules apply related to imposition of the automatic stay.  In addition, under Section 727 (a)(9), you may only get a Chapter 7 discharge within 6 years of a Chapter 13 discharge unless your Chapter 13 case paid 100% of the allowed unsecured claims or 70% of the allowed unsecured claims and you proposed the plan in good faith and it was your best effort.

The Chapter 13 context is slightly different.  The same filing and discharge rules apply but the time frame is shorter.  Under Section 1328(f) of the Bankruptcy Code, you may obtain a Chapter 13 discharge 4 years after your Chapter 7 discharge.  In the case of a prior Chapter 13 discharge, you must wait 2 years.  In the case of a Chapter 13, most often you will have waited longer than 2 years as most Chapter 13 cases last about 5 years before a discharge is issued.

As I said, if you did not get a discharge some different rules apply and it depends on what happened to your case.  As a general rule, if your case was dismissed for failing to follow a court order (i.e. file your schedules and statements or failure to make plan payments) you must wait 180 days to file a case in any event.  Under Section 362(c)(3)(A) if you have filed a case within one year of your current filing the automatic stay goes into effect for only 30 days.  If you want the stay to remain in place you will need to file a motion to have the court extend the stay.  Under Section 362(c)(4)(A) if you have filed two or more cases within one year of the current filing the stay does not go into effect at all.  If you want the automatic stay in place you will need to file a motion to impose the stay.  In addition, you will need to appear before the court and provide good cause to the court to impose the stay.

Finally, there may be a strategic decision as to why you would ignore these filing issues and file a second bankruptcy whether you would get a discharge or not.  This type of bankruptcy is often referred to as a Chapter 20 bankruptcy.  It often comes up in the context of a Chapter 13 being filed on the heels of a Chapter 7 discharge and most often involves second mortgage liens.  In a Chapter 7, you are able to discharge your promise to pay a second mortgage debt but you cannot remove the lien on the property.  The only way to remove a lien is through a Chapter 13 and the lender can no longer be secured.  This usually comes up when the home value is less than what is owed on the first position lien.   Because you are interested in getting rid of the lien in a subsequent Chapter 13 bankruptcy, whether you get a discharge does not matter.  As long as you complete the case the lien will be stripped as part of your filing.  With this type of bankruptcy plan, it is highly recommended to have an attorney assist with this complicated approach.

In my next post I will examine bankruptcy fraud in light of the recent plea deal involving a Real Housewife from New Jersey.

About the Author

Terry Goddard

Terry L. Goddard Jr. heads the firm's consumer and small business bankruptcy group in both the Baltimore and Southern Maryland offices of Skeen & Kauffman LLP. Terry has over six years of bankruptcy experience assisting clients navigate the complex and intimidating filing for protection under Chapter 7 and Chapter 13 of the bankruptcy code. Terry has been a practicing attorney since 2002.


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