In my time as an attorney practicing bankruptcy law, I have consistently seen one question arise with potential clients – "if I have filed a bankruptcy in the past, when am I allowed to file another?"
In a world filled with economic uncertainties, it is a question that is asked more and more frequently by potential clients. Some may have experienced an expansive (and expensive) medical situation. Some have experienced job loss after having successfully completed a bankruptcy filing, resulting in a new financial crisis. Increasingly, I have seen clients who have seen a decrease in hours or pay from their employer causing financial stress. In these instances, many feel that they have no remedy as they believe that bankruptcy is not an option due to their prior filing. The short answer is that this is not the case. Bankruptcy may still be an option.
There is no magic number in terms of a "limit" on bankruptcy filings. Multiple filings may lead to more scrutiny by the Trustee's office to ensure no abuse is taking place, but there is no absolute limit. The real question should be "when am I eligible for a discharge?" In terms of bankruptcy relief, the discharge is your major goal. A discharge from the debts means that your personal liability has been removed. You can file bankruptcy after bankruptcy after bankruptcy, but to truly gain any benefit, eligibility for a discharge must be reviewed.
So when is a person eligible for a discharge in a new bankruptcy? It all depends upon what chapter of bankruptcy was filed before and what chapter WILL be filed. The time is counted from the date of filing of the prior bankruptcy and the date of filing of the second case. The time frames between bankruptcies to determine discharge eligibility under the Bankruptcy Code are as follow:
8 years between Chapter 7 filings – 11 USC 727(a)(8)
2 years between Chapter 13 filings – 11 USC 1328(f)(2)
4 years between a Chapter 7, 11 or 12 filing and Chapter 13 filing – 11 USC 1328(f)(1)
6 years between a Chapter 13 filing and a Chapter 7 filing (if under 70% plan) – 11 USC 727(a)(9)
Pre-bankruptcy planning and review with an experienced bankruptcy attorney can help Debtors effectively gain benefit from a new case filing. There are even some instances where it is strategic to file a follow-up bankruptcy that is ineligible for a discharge in order to greater protect a Debtor. An attorney who has extensive practice with bankruptcy law can help you determine what is best for your particular situation, even when there is a prior filing.
Contact a Palm Beach bankruptcy lawyer today for a case evaulation.