How often you can file for bankruptcy in Pennsylvania typically depends on the type of Bankruptcy you file.
Many people need to file bankruptcy more than once, due to any number of reasons, including but not limited to:
- Newly-accrued debt
- Money mismanagement
- Health issues and medical expenses
- Job loss or reduction in hours
- Needing to relocate
- Family issues
- Unexpected financial pressures
It is not unusual for our bankruptcy law office to file bankruptcy for a second, third, or even a fourth time for individuals or couples. These are good honest individuals who run into financial trouble through no fault of their own and find themselves in debt again.
How to File Bankruptcy More Than Once
Congress has provided the means for individuals and couples to file for bankruptcy relief more than one time. There are a number of rules, however with which we must comply in order to determine the eligibility to file a new bankruptcy case.
First, there are no rules limiting the number of times that you can file for bankruptcy relief.
Second, some cases require a waiting period or a court motion in order to allow you to file bankruptcy again. There are different time limits on how long you need to wait before filing for bankruptcy relief again. What time limit applies depends on what Chapter of Bankruptcy you have filed for in the past and what chapter you wish to file now.
Filing Chapter 7 Bankruptcy After a Chapter 7 Bankruptcy
You Received a Discharge in Your First Chapter 7 Bankruptcy
If you have filed a Chapter 7 bankruptcy, which typically discharges all debts that are able to be discharged, and you received a discharge, then you will not be permitted to file another Chapter 7 Bankruptcy Petition for a period of 8 years from the date of the initial filing of the first case before you are eligible to receive a Chapter 7 Discharge in a second Chapter 7 Bankruptcy case.
You Did Not Receive a Discharge in Your First Chapter 7 Bankruptcy
If you filed a Chapter 7 Bankruptcy Petition and did not receive a discharge or your case was dismissed, you can typically file another Chapter 7 petition at any time as long as your first case was not dismissed for reasons of abuse or there is an order barring you from refiling a new case.
A Chapter 7 case may not receive a discharge if there are issues that prevent you from completing all the required steps necessary in your case. For example, you may not receive a discharge if:
- you are sick and do not attend the meeting of creditors or get excused from attending the meeting of creditors;
- you are unable to get in contact with your lawyer;
- you fail to complete the credit counseling prior to filing;
- you fail to complete the financial management course;
- You fail to meet any other filing requirement or requirement of the Court or the Chapter 7 Trustee.
If your first case was dismissed and you attempted to comply with what you were supposed to do, then you should be able to file a Chapter 7 Bankruptcy case again. In some cases, The Bankruptcy Court may issue a Court Order which prevents you from filing a new case for a period of six months for example, before you are permitted to file for relief again.
Filing a Chapter 13 Bankruptcy after a Chapter 7 Bankruptcy
If your Chapter 7 Petition was properly discharged, but you have come into new financial difficulties which necessitate the filing of another bankruptcy case, you can immediately file a Chapter 13 Bankruptcy petition – even on the day after you have received your Chapter 7 discharge.
Under these circumstances, you will not be eligible to receive a discharge in the Chapter 13 case. In order to get a discharge you’ll need to wait at least four years from the date of the initial Chapter 7 filing in order to receive a discharge in your new Chapter 13 case.
Filing a Chapter 7 Bankruptcy after a Chapter 13 Bankruptcy
If you filed for Chapter 13 relief and received a discharge, then you need to wait for six years from the date you filed for Chapter 13 in order to file a Chapter 7 Bankruptcy case and be eligible to receive a discharge.
There is an exception to this rule – If you paid back all of your creditors in full in the Chapter 13 case- also known as a 100% plan or if you have paid back at least 70% of the amount of your unsecured debt and the Court deems your repayment plan as representing your best efforts and proposed in good faith. You are then permitted to file for Chapter 7 Bankruptcy in less than 4 years in order to be eligible to receive a Chapter 7 discharge.
It is important to note that the rule of waiting six years only applies if you received a Chapter 13 discharge. If you did not receive a discharge, then in many instances you are permitted to immediately file for relief under Chapter 7 Bankruptcy
Filing a Chapter 13 Bankruptcy after a Chapter 13 Bankruptcy
You can file Chapter 13 immediately after receiving a Chapter 13 discharge, but you will not be eligible to receive a bankruptcy discharge in the new case. However, the discharge may not be your goal. Instead, you may just need the protection of the Bankruptcy Court.
A perfect example is the case where someone receives a Chapter 13 discharge of debts. They then fall six months behind on their mortgage. Their goal in filing another Chapter 13 is to save the house.
Other examples include:
- Missing car payments and wanting to avoid auto repossession, and
- Owing non-dischargeable taxes and wanting to prevent the IRS from garnishing your paycheck.
By filing for Chapter 13 Bankruptcy protection, you will get up to five years to catch up on the missed mortgage payments, up to five years to catch up on the auto payments and in many cases lowering the auto loan interest rate as well, and get up to five years to repay non-dischargeable tax debt. This new Chapter 13 proceeding will be able to get you the result you are seeking without the need for a discharge.
Getting a Discharge in the Second Chapter 13
If you received a Chapter 13 discharge and want to file Chapter 13 again with the goal of receiving a discharge, then you need to wait for two years from the date that you filed the first Chapter 13 case. As a practical matter, most Chapter 13 cases that receive a discharge last between three and five years, so the two-year time delay is not really a barrier.
Filing Bankruptcy After Your First Case was Dismissed
If you filed a Chapter 13 bankruptcy case and the case was dismissed, you can file a new bankruptcy case right after the dismissal. However, the automatic stay expires after 30 days unless you file a Motion to Extend the Automatic Stay with the Bankruptcy Court.
If you have two prior Chapter 13 Bankruptcy cases that were dismissed within the last year, then the Bankruptcy Stay is not effective against creditors who are going after your property or taking action against your estate. A Motion needs to be filed by the Attorney on behalf of the filing debtor with the Bankruptcy Court in order to impose or the Automatic Stay against all creditors.
The importance of this provision means that a creditor can take action without the need to ask the Bankruptcy Court for relief from the automatic stay, or permission to proceed, unless you obtained an Order imposing the automatic stay.
There is another rule. You are not eligible to be a debtor for a period of 180 days if you were a debtor in a previous case and you withdrew the Bankruptcy Petition by filing for a voluntary dismissal of your prior case following the filing of a Motion for Relief from Automatic Stay by a creditor in the case.
What is Chapter 20?
There is no such type of Bankruptcy listed under the Bankruptcy Code. Chapter 20 is the name for the following procedure:
- Filing Chapter 7 to receive a discharge of debt:
- FIling Chapter 13 immediately thereafter to catch up with mortgage, auto loan arrears, support arrears, or past-due taxes.
The process of filing for Chapter 7 Bankruptcy and then filing Chapter 13 Bankruptcy can be used to allow a person to qualify for Chapter 13. For example, if their debts are too large to file for Chapter 13, but the debts are discharged under Chapter 7, then an individual or couple can then meet the debt limits and be qualified to file for Chapter 13.
The Chapter 20 procedure can also be used by an individual or couple who felt they could not afford to save their home since they were out of work and first filed a Chapter 7 Bankruptcy Petition to clear their debts. After filing for Chapter 7 Bankruptcy and obtaining a discharge, the individual or couple obtains a job or position or otherwise develops the ability to make plan payments through their a Chapter 13 case. In this situation, the filing of a Chapter 13 bankruptcy petition following a Chapter 7 discharge makes perfect sense.
Your Bankruptcy Situation Will Be Unique to You
Everyone’s debt situation is different. You must inform your attorney of any prior bankruptcy filing in the United States, regardless of where it was filed, as this may affect your ability to obtain bankruptcy protection or a discharge. Failing to tell your attorney of prior filings also impacts that attorney’s ability to strategize and get you the best result you can hope for.
By being open with your attorney and explaining any prior bankruptcy filings and circumstances, you stand the best chance of being able to file for bankruptcy relief and achieve a successful result in line with your goals.
The Law Offices of David M. Offen have handled over 12,000 Chapter 7 and Chapter 13 Bankruptcy cases covering nearly every possible type of situation. You can call Attorney David M. Offen to discuss your specific situation and get advice on how Bankruptcy can help you turn your financial life around, even if you have already filed for Bankruptcy relief in the past.