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Filing for Bankruptcy After a Prior Discharge Under Chapters 7 and 13.

PatriciaEGreen2 from morguefile.comBankruptcy under Chapter 7 or 13 offers individuals the opportunity to discharge certain debts, giving the debtor the opportunity to make a somewhat fresh start. Unexpected events can always strike, however, such as the loss of a job or an uninsured illness or injury. Bankruptcy law prohibits an individual from obtaining a discharge of debts within a certain period of time after a discharge in a prior bankruptcy case. When planning a bankruptcy filing, individuals should be aware of the time restrictions for different forms of bankruptcy.

Filing a Chapter 7 Bankruptcy After a Previous Chapter 7 Discharge

A bankruptcy court may not discharge debt in a case if the debtor filed a previous Chapter 7 case, and obtained a discharge, within the previous eight years. 11 U.S.C. § 727(a)(8). The filing date for a subsequent Chapter 7 case must be at least eight years and one day from the filing date of the previous case.

Filing a Chapter 7 Bankruptcy After a Previous Chapter 13 Discharge

A debtor who obtained a discharge under Chapter 13 must wait at least six years from the filing date of that case to file a new case under Chapter 7. 11 U.S.C. § 727(a)(9). The six-year restriction does not apply in two situations: (1) at the end of the Chapter 13 case, the debtor had paid one hundred percent of the unsecured claims allowed in the case; or (2) the debtor proposed a Chapter 13 plan in good faith and used best efforts, and paid at least seventy percent of all allowed unsecured claims.

Filing a Chapter 13 Bankruptcy After a Previous Chapter 13 Discharge

If a debtor has filed a Chapter 13 case, having already obtained a discharge of debt in a prior Chapter 13 case, a bankruptcy court cannot grant a discharge in the new case until at least two years have passed since the previous discharge. 11 U.S.C. § 1328(f)(2). Please note that the time restrictions in this situation are based on the dates of the court’s discharge orders, not the original filing dates. Since most Chapter 13 cases take longer than two years to complete, this time restriction is rarely an issue for debtors.

Filing a Chapter 13 Bankruptcy After a Previous Chapter 7 Discharge

After a debtor has received a discharge of debt through Chapter 7, the debtor usually must wait at least four years from the filing date of the Chapter 7 case before filing a Chapter 13 case. 11 U.S.C. § 1328(f)(1).

Filing a Chapter 7 or 13 Bankruptcy After a Previous Case That Did Not Result in a Discharge

A bankruptcy case may not result in a discharge of debts for any number of reasons. In certain cases, such as dismissal by the court due to non-compliance by the debtor, a court may bar a debtor from filing a new bankruptcy petition under any chapter for 180 days from the original filing date. 11 U.S.C. § 109(g). In cases where the 180-day bar does not apply, a debtor may file a new petition under Chapter 7 or 13 at any time.

An individual in financial distress may find themselves unable to pay their debts with their current income. Bankruptcy offers a way for those individuals to find some relief by selling assets to pay down debts, restructuring debt payments, and achieving a discharge of debts from a bankruptcy court. Bankruptcy attorney Devin Sawdayi has represented clients in the Los Angeles area in all stages of the Chapter 7 and Chapter 13 bankruptcy process since 1997. To schedule a free and confidential consultation, contact us today online or at (310) 475-9399.

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Photo credit: PatriciaEGreen2 from morguefile.com.