For clients who have filed bankruptcy before, one of the first questions they ask me is, "can I file bankruptcy again?" Depending on when your last case was filed and what chapter it was filed under will determine whether you can receive your discharge in a subsequent case.
If you filed a chapter 7 case and received your discharge, you are not eligible to receive another chapter 7 discharge for eight years. The eight-year period is measured from the filing date of your previous case, not the discharge date. If the filing dates between your two chapter 7 cases is more than eight years, then you are eligible for a discharge in your new chapter 7 case.
If you received a discharge in a chapter 7 case, you are not eligible for a discharge in a chapter 13 case until four years have passed. Again, the four-year period is measured from the filing date of the chapter 7 case to the filing date of the chapter 13 case. However, as explained below, there may be many reasons why filing under chapter 13 can beneficial even if you will not receive your discharge.
If you received a discharge in a chapter 13 case and you paid less than 70% to unsecured creditors during your case, you are not eligible to receive a discharge in a chapter 7 case for six years. The six-year period is measured from the filing date of the chapter 13 case.
Finally, if you received a discharge in a chapter 13 case, you cannot receive a discharge in another chapter 13 case filed within two years of the filing date of the first case. However, because chapter 13 cases typically last at least three years, this scenario rarely presents itself.
1) Is there ever a reason I would file bankruptcy if I was not going to receive my discharge?
- Yes! One of the principal benefits of chapter 13 is the ability to cure defaulted loans, including mortgages and vehicle loans, and restructuring tax debt. Debtors can enjoy these benefits of chapter 13 even if they are not going to receive their discharge. Indeed one of the strategies for reducing payments made in a chapter 13 case can be to file chapter 7 prior to filing chapter 13, such that unsecured debt is eliminated prior to filing chapter 13 (thus lowering your chapter 13 plan payments).
2) What if I converted my case to a different chapter, and then received my discharge?
- If you converted your case, the "filing date" for purposes of determining whether you are eligible for a discharge in a subsequent case is the date of your originally filed case, not the conversion date.
3) What if my chapter 13 case was dismissed prior to completion, can I file again?
- If your prior case was dismissed, you would be eligible to receive a discharge in your subsequent case (because you never received your discharge in your prior case). However, the more important issue relates to whether you will have the benefit of the automatic stay throughout your case. If your case was dismissed within a year of when your second case is filed, the automatic stay will expire after thirty (30) days, or will not be in effect at all if you have had two cases dismissed within the past year. If your case was dismissed and you wish to refile, it is best to consult with an attorney.