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You Deserve Financial Relief

Russell G. Small and Kenneth Lenz

Am I allowed to file for bankruptcy more than once?

| Sep 15, 2020 | Bankruptcy

Almost all residents of the Bridgeport area who file for bankruptcy walk away from the process not wanting to repeat it.

Aside from the time and stress involved, Connecticut residents who file for bankruptcy really do want to use their fresh financial start to move forward to a better future.

Unfortunately, a bankruptcy discharge is not a free pass from difficult life circumstances. People do lose their jobs more than once, and other difficult problems, like medical emergencies and family situations may come up after a person files for bankruptcy.

The good news is that people are allowed to file for bankruptcy more than once. However, there are some important limitations.

Limit on filing after a discharge

The goal of an individual bankruptcy is for the debtor, or joint debtors, to obtain a discharge from their debts. The discharge is a court order which gives permanent protection from most creditors.

With respect to discharged debts, a debtor cannot be forced to pay them, and the creditor is legally prohibited from pursuing most collection efforts. (Mortgage-holders may, however, still foreclose on property even after discharge.)

As a refresher, Chapter 13 bankruptcy involves debtor repaying a portion of their outstanding debts under a court-approved plan and then getting a discharge.  To obtain a discharge under Chapter 7, a debtor must turn over all non-exempt property to sell in satisfaction of their debts.

After a discharge in a Chapter 7 bankruptcy, a person must wait 8 years before filing another Chapter 7 bankruptcy. If a person filed a Chapter 13 bankruptcy and received a discharge, then he or she must wait 6 years, although he or she may qualify for an exception to this limitation.

Although they are shorter, time limits also apply if a person has received a discharge and now wishes to file bankruptcy under Chapter 13.

Limit on multiple filings generally

These time limits do not apply when a person does not receive a discharge from debts. For example, if someone who filed Chapter 13 can no longer make payments, then he or she may have the case dismissed.

After most dismissals, it is permissible to re-file for bankruptcy immediately. In fact, there may be good legal reasons for doing so.

However, there are some limits on these types of multiple filings as well.

For one, the automatic stay, which grants temporary protection to debtors immediately upon their filing, may not apply. If a debtor has one prior bankruptcy in the previous 12 months, then the automatic stay only lasts for 30 days unless the court grants an extension.

If there are multiple prior bankruptcies, then the debtor must ask the court to impose the automatic stay. In other words, the automatic stay is not really automatic at all.

Depending on the circumstances, the court may also deem multiple filings to be abusive of the bankruptcy system and may bar the debtor from re-filing for a time.

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