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Frequent Bankruptcy Question: Can I File Bankruptcy More Than Once?

bankruptcyOur Northern Kentucky office regularly helps local families file bankruptcy a second or even third time. More than one bankruptcy filing is not only possible, it can be expected in certain circumstances. For example, if a client has significant tax debts and credit card debts and knows high payments in a Chapter 13 bankruptcy are likely, it might make sense to file a Chapter 7 to get rid of the credit card debts first, and then file a Chapter 13 to pay off the tax debts.

The issue many clients do not understand is that a certain period of time has to happen between bankruptcies before the second bankruptcy can result in a discharge, or before the second bankruptcy is even possible. Lawrence & Associates’ attorneys see many people who need to file a second bankruptcy, only to get frustrated when they are told they cannot get a discharge or that they will have to file a different bankruptcy than the kind they wanted. For that reason, we are offering the following general guidelines for potential clients so they have a rough guess as to the options available to them in a second bankruptcy filing.

Filing a Chapter 7 as a Second Bankruptcy

You cannot file a Chapter 7 if you filed a previous Chapter 7 within the past eight years in which you received a discharge. Similarly, you cannot file a Chapter 7 if you filed a previous Chapter 13 within the past six years in which you received a discharge. There is an exception to the six year rule if your prior bankruptcy either paid all the unsecured claims in full or plan payments in the earlier case were at least seventy percent of the unsecureds and the good faith plan in the prior case was the debtor’s best effort. You also cannot file a Chapter 7 if you have had a previous bankruptcy dismissed either voluntarily by you, or because a Kentucky or Ohio court ruled that you were in bad faith or violation of a court order.

Some rules for you to take away: If it has been more than eight years since you filed your bankruptcy, you are ok no matter what you file now. If it has been less than eight years, you need to determine both whether a bankruptcy is possible and whether a discharge is possible. The six year test has exceptions that rely upon the judgment of the court in each individual case, and it is in your best interests to get an experienced bankruptcy attorney, like those at Lawrence & Associates, who will be familiar with the way local courts lean on this subject.

Filing a Chapter 13 as a Second Bankruptcy

As a general rule, a Chapter 13 bankruptcy can be filed at any time after a prior bankruptcy. The issue is not whether the Chapter 13 can be filed, but rather whether the debtor can receive a discharge in the Chapter 13. Discharge in a Chapter 13 will be denied if a prior Chapter 7, 11, or 12 was filed within four years of this Chapter 13’s filing, or if a prior Chapter 13 was filed within two years of this Chapter 13’s filing. Additionally, if the Chapter 13 is being filed within one year of a prior bankruptcy’s dismissal, a motion to extend the automatic stay must be filed so creditors do not have the right to pursue foreclosure, repossession, or garnishment during the bankruptcy.

A Chapter 13 can still have value even if a discharge is not available, so it is a good idea to talk to an experienced bankruptcy attorney to determine if a Chapter 13 will help no matter how long it has been since your last bankruptcy. Further, the automatic stay is critical for Northern Kentucky and Greater Cincinnati residents to preserve their assets in bankruptcy, so be sure to consult with a lawyer before filing.

Every Case Is Different, So Don’t Go It Alone!

These are general rules, and every case is different. There may be something about your case that is unique and requires a variation from the norm. Don’t file bankruptcy without legal help. Lawrence & Associates takes pride in representing Northern Kentucky and Greater Cincinnati residents just like you. We are Working Hard for the Working Class, and we can help. Call today!

Contact Us (859.371.5997) for a Free Consultation

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