Niles Bankruptcy Attorney On How Often One Can File

Unfortunately, as a Niles bankruptcy attorney, I get this question because people fall into debt problems even after they have filed bankruptcy in the past.  If you are someone who needs a fresh start, you can file a Chapter 7 bankruptcy case once every eight years.  You can also file a Chapter 13 numerous times; however, you can only receive a discharge once every four years if you had a prior Chapter 7 that went to discharge prior to filing your 13. 

Typically, Chapter 7 is the type of case where someone gets a fresh start and then they may incur some debt after that Chapter 7 is filed and they wind up getting in trouble again.  I often see this in the case of auto financing where someone gets auto financing immediately after a Chapter 7 bankruptcy case and lo and behold, something happens during the next several years where they can’t make their auto payment and they start to be sued for auto deficiency.  For those clients, they have to wait eight years from when they originally filed their Chapter 7 case to be able to file a second Chapter 7 case. 

The one exception to this which I see on occasion is where someone does a Chapter 7 bankruptcy case, they do not take the two hour financial management class and the case closes without a discharge.  In those particular cases, most creditors are not going to pursue the debtor because they feel that one, either the debt has been eliminated even though it hasn’t been or two, they fear that the debtor will bring a motion to reopen and get a discharge.  Thus, creditors are hesitant to go after someone who has filed a Chapter 7 but has not received a discharge.  The benefit for the debtor in that case is since they did not receive a discharge; they can actually file another Chapter 7 case at any time because they didn’t receive a discharge within the last eight years. 

As far as Chapter 13 goes, you can file a Chapter 13 and get a discharge where you pay less than 100% back on your debts and then you can file another Chapter 13 immediately thereafter, but it’s going to be either a no discharge case or you would have to pay 100% back.  Now, if you don’t pay 100% back and it’s a no discharge case, the creditor still has to abide by the Automatic Stay.  The Automatic Stay prohibits the creditor from collecting against you, even though you are only paying back less than 100% through your Chapter 13.  The key distinction is once your Chapter 13 plan payments are complete; you do not receive a discharge so creditors can come after you for the difference that they were not paid through the Chapter 13.  

I always recommend if you are filing a Chapter 13 bankruptcy case after one was previously discharged within four years is that you try to pay 100% back so that you are not left with any debt after you file your second Chapter 13 bankruptcy case.  The timing and sequence of these cases is somewhat complex so I recommend that you speak with an experienced bankruptcy attorney in your local area before you try to file either type of bankruptcy case.