Bankruptcy allows debtors to have a fresh start with their finances. Filing bankruptcy is a legal proceeding that will help you repay debts to your creditors. Seeking help from a trusted Phoenix bankruptcy lawyer is important before filing bankruptcy since it is not easy to deal with financial problems. 

If a bankruptcy filing is one of your options, you should first understand the basics of relevant bankruptcy laws and the bankruptcy process. Trusted bankruptcy attorneys can assist you on how to file and explain how often you can file for bankruptcy.

Bankruptcy discharges are subject to time limits, but not bankruptcy filings. Bankruptcy law does not require an individual to wait for a certain period before filing a bankruptcy petition again. However, you will not qualify for another discharge if you filed for bankruptcy too soon after your debt has been forgiven. If you file for bankruptcy too soon, most likely it would be a waste of money and time. Timing is very important when you file for bankruptcy.

Multiple BankruptciesIf you would like to file a petition in bankruptcy under the same bankruptcy chapter as you did before, here are the timeframes:

–           In Bankruptcy Chapter 7 (liquidation bankruptcy), before an individual can file a second bankruptcy petition under Chapter 7, the filer must wait for 8 years after the first bankruptcy filing.

–           Under Chapter 13 (reorganization bankruptcy), before a debtor can receive a second bankruptcy discharge, the debtor should wait for 2 years between the filing dates.

  • Order is also important when filing different types of bankruptcy

When filing a subsequent bankruptcy petition under a different bankruptcy chapter (other than the one in which you obtained your first bankruptcy discharge), the following are the waiting timelines:

–           Bankruptcy Chapter 13 before Chapter 7

If you were given a discharge, you will have to wait for 6 years before filing Chapter 7. You will not be waiting that long if you repay all your unsecured creditors under your Chapter 13 filing. This is if the debt repayment plan was offered in good faith and reflected your best effort.

–           Chapter 7 bankruptcy before Chapter 13

If the bankruptcy court issued the first bankruptcy discharge under liquidation, you will have to wait for 4 years after filing a Chapter 7 bankruptcy case.

  • A second filing may be appropriate even if there is no bankruptcy discharge

In some cases, you will not need to obtain a bankruptcy discharge. Sometimes, you just need more time to pay back the debts you owe from creditors. Take for example an individual who owes federal taxes that he or she cannot wipe out in bankruptcy, but he or she cannot come up with a fair and realistic payment plan. Instead of a wage garnishment, you may file bankruptcy Chapter 13 and spread out the payments in a span of three to five years.

Qualifying for Bankruptcy Chapter 7 and proving that you have enough monthly income to pay off the debt repayment plan may be difficult. However, after taking into consideration the debts that would be eliminated, it is possible. In any case, you should seek legal advice from a Phoenix bankruptcy lawyer for any questions regarding bankruptcy proceedings.

  • What happens if you are not granted a discharge in the first bankruptcy case?

In most cases, if you did not get a discharge during the first petition, you could file again and obtain one in the second. However, this is not always the scenario. When you file multiple bankruptcies in a short period, you lose the great benefits of the automatic stay which prevents creditor harassment, wage garnishment, and foreclosure.

  • What happens when the first bankruptcy case was dismissed by the bankruptcy court

Dismissing the case after a creditor filed a motion to lift the automatic stay, failure to obey a court order, or failure to appear in court is not uncommon. If this is the case, you may be subject to a 180 day waiting period.

If the bankruptcy discharge was dismissed by the bankruptcy court, you may be able to file again but you will certainly not be eligible for a discharge of the debts cited in your previous case. This is yet another situation in which you should seek legal help from a knowledgeable Phoenix bankruptcy attorney.

  • When is it abusive to file multiple bankruptcies?

A Chapter 7 bankruptcy filing that fails to pass the bankruptcy means test – the eligibility criteria that decide an individual’s right for a discharge – is referred to as abusive bankruptcy filing. However, the term may also refer to a petition filed by those who are attempting to simply escape a creditor or buy more time.

With this said, the bankruptcy court generally disapproves of debtors who file without intending to complete the bankruptcy proceeding. Repeat filers may face repercussions like lack of bankruptcy protection or denial of a bankruptcy discharge if they use such tactics.

Consulting a credible and experienced bankruptcy lawyer is important to have a successful bankruptcy proceeding. Contact our Phoenix bankruptcy lawyer for a free consultation regarding your bankruptcy case.