3 Things To Know About Filing For Bankruptcy Again
Posted on: 3 August 2020
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No one plans on filing for bankruptcy more than once during their lifetime, but circumstances can change after the discharge of your bankruptcy, and another bankruptcy filing may be your only option for financial success.
Since multiple bankruptcy filings are not common, the average person doesn't know much about the ins and outs of filing for bankruptcy a second time. Here are three important things to know when you are considering a second bankruptcy to help ease your financial burdens.
1. A Prior Discharge Matters
Most people file for bankruptcy hoping to have their debts discharged. It's important to keep in mind that not all bankruptcies will end in a discharge of debts. If you fail to provide the required paperwork the bankruptcy trustee needs to complete your case, your bankruptcy could be dismissed.
Most bankruptcies are dismissed without prejudice, which means that the option to re-file exists. If you have not received a discharge for your first bankruptcy filing, you can immediately file for bankruptcy again in the future.
2. An Automatic Stay Is a Tool
As soon as you file for bankruptcy, the court grants an automatic stay on your behalf while your bankruptcy case is reviewed and resolved. This stay prevents your creditors from taking any action against you in an attempt to collect a debt.
Garnishments will cease, and any civil court cases seeking judgment against you will be dismissed. An automatic stay is in place for the duration of your case and is lifted only when the bankruptcy is dismissed or the debts are discharged.
Some people use the automatic stay as a tool to help them retain ownership of important assets. For example, if you are behind on your mortgage payment and you want to create a structured repayment plan, then you could file a Chapter 13 bankruptcy. The automatic stay would prevent the lender from foreclosing on your home and give you time to create a new payment plan.
Your attorney can help you determine if you are eligible to file for bankruptcy in an attempt to use the automatic stay as a tool to your advantage.
3. Different Chapters Have Different Limitations
The type of bankruptcy you filed in the past will affect your ability to file for bankruptcy in the future.
If you have filed for bankruptcy in the past, a Chapter 7 bankruptcy must have been filed at least four years before you can file for Chapter 13 bankruptcy. You are required to wait eight years from the filing date to file another Chapter 7 bankruptcy. Let your attorney determine if the appropriate time has passed before you file a new bankruptcy case.
To learn more, contact a bankruptcy lawyer.