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When Can You File a New Bankruptcy If You Filed Bankruptcy in the Past

My last blog was about the timing rules about when you can file a new bankruptcy after having filed one before. But they only apply if you got a discharge of your debts in that prior case. Those timing rules also only apply if you are intending to get a discharge in your new case, which sometimes you don't need.

The Usual Waiting Periods between Bankruptcy Filings

The waiting period from one bankruptcy filing to the next is 2, 4, 6 or 8 years, depending on the Chapter of the prior bankruptcy AND the Chapter of the new case being filed:

  • 2 years: Prior Chapter 13 case to new Chapter 13 case.
  • 4 years: Prior Chapter 7, 11, or 12 case to new Chapter 13 case.
  • 6 years: Prior Chapter 13 case to new Chapter 7 case.
  • 8 years: Prior Chapter 7 case to new Chapter 7 case.

In every one of these waiting periods, the time begins to run at the previous case's filing date, and the applicable period of time must pass before the new case can be filed.

Focus of the Timing Rules Only on Bankruptcies Resulting in a "Discharge"

These waiting periods don't apply unless the prior bankruptcy case included a discharge of your debts. Furthermore even if there was such a discharge in the prior case, if no discharge is needed or expected in the new case, the waiting periods again don't apply.  In these situations you can file without any waiting.

To understand these in practical terms let's look at both of these situations, starting with the lack of a discharge entered in the prior case.

Without a Prior Discharge, You Can File a New Bankruptcy Without Waiting

Usually you file a bankruptcy to get a "discharge"-a legal write-off-of your debts. Successful consumer bankruptcies usually result in such a discharge.

So if you filed a personal bankruptcy before-whether a Chapter 7 "straight bankruptcy" or a Chapter 13 payment plan-and you remember completing it appropriately, you very likely got your debts discharged in that case. You would have been informed in writing by the bankruptcy court. If you don't recall and did not keep your paperwork, your new attorney should be able to find out from bankruptcy court records whether or not you received a discharge.

It's worth making sure. It is less rare than you might think that clients come in thinking that their bankruptcy years ago discharged their debts when it didn't. They may have received a "dismissal" order from the court late in the case instead of a "discharge" order, because of some seemingly minor error-such as completing the financial management class but not sending the appropriate paperwork about it to the court.  So to make sure, find your discharge order, contact your prior attorney about it, or ask your new attorney to find out.

Without Intending to Get a Discharge in your New Case, You Can File It Without Waiting

Usually getting a discharge of debts is the main reason that a person files bankruptcy. But there is a separate big reason--stopping your creditors' collection action against you and your assets through the "automatic stay." Chapter 13 bankruptcy is particularly beneficial for this because it can protect you not just for months, but for up to the 3-to-5 years that such a case remains open. This is especially valuable with special, potentially very aggressive creditors.

Using an example, imagine that you filed a Chapter 7 case two years ago at the time that you owed $3,000 in income taxes to the IRS. You knew these taxes would not be discharged in that case, but you also knew you could make arrangements with the IRS after discharging your other debts to take care of the taxes through monthly installment payments. But then later during the following two years assume that your income was reduced, so that you were no longer able to make the monthly tax payments. Plus assume you've added another $2,500 of income tax debt for the most recent tax year (from underwithholding or underpaying estimated quarterly taxes), AND fallen behind $3,000 on your monthly child support. You have the IRS threatening to garnish your bank accounts, and support enforcement is threatening to suspend your driver's and occupational/professional license.

From what I said near the beginning of this blog, you would normally need to wait four years from the filing of your earlier Chapter 7 case to the filing of a new Chapter 13 case. But in this example that's still two years away, and you need immediate relief.

And you would be able to get that immediate relief. That 4-year waiting period only applies if your new Chapter 13 case will come with a discharge of your debts-you can file one here without needing one. Neither the recent taxes nor the support can be discharged in bankruptcy, so a discharge would do you no good anyway. Instead what you need is protection from the garnishments and license suspensions. Combined with that, you need a payment plan for satisfying those obligations on terms that fit your present financial circumstances.  A new Chapter 13 would likely provide you both. So in this example, you could file a Chapter 13 case at any time, without waiting for the usual 4-year period to expire.

Conclusion

The lesson here is that you should not assume that the 2, 4, 6, and 8-year time periods necessarily apply in your situation. So if you filed a prior bankruptcy case in the past and now need new help, meet with an experienced bankruptcy lawyer in your area to find out how the timing rules apply to your unique situation.  To contact our office regarding bankruptcy go to: Murrieta Bankruptcy Lawyer .

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