Most people who file for bankruptcy in Georgia have no expectation that they will ever file for bankruptcy again. However, circumstances can change and someone may consider filing for bankruptcy a second time. This raises the question, how many times can someone receive a discharge?
The short answer is that there are no legal requirements regarding how many times an individual or couple can file for bankruptcy, per se. However, this does not mean that someone can file for bankruptcy an unlimited amount of times. From a practical standpoint, certain factors have to be taken into consideration before someone can expect to qualify for Chapter 7 or Chapter 13 bankruptcy again.
Below are some of the factors involved in filing for a bankruptcy discharge depending upon the prior and anticipated types of bankruptcy.
Going From Chapter 7 to Chapter 7 Bankruptcy
Chapter 7 bankruptcy involves a complete liquidation of almost all of your debts. Therefore, people who file a Chapter 7 case can anticipate that the courts will expect them to start over from square one. After all, they should be building assets after a discharge, not incurring more debts.
For this reason, Chapter 7 bankruptcy filers must wait eight years from the date of the original filing before filing for Chapter 7 bankruptcy again. They must also be prepared to once again pass the Chapter 7 means test to see if they are eligible for Chapter 7 rather than Chapter 13 or a debt settlement program.
Going From Chapter 7 to Chapter 13 Bankruptcy
Filing for Chapter 13 bankruptcy after a discharge of debts under Chapter 7 is often referred to as a “Chapter 20” bankruptcy. Here’s how it works: Under Chapter 7, all applicable debts are discharged. After four years, if the filer is still paying off debts or has missed secured debt payments, the filer may seek out Chapter 13 bankruptcy to rearrange their debts so they are easier to pay off in the next three to five years.
Though debts such as credit card bills or car loans are not discharged in a Chapter 13 bankruptcy, they are modified. Plus, interest fees and related charges will not accrue during the Chapter 13 payment plan period.
Going From Chapter 13 to Chapter 7 Bankruptcy
Some individuals or couples who initially contact a bankruptcy attorney to file a Chapter 13 case may find themselves still in debt. After a time limitation of six years, they can pursue a discharge under Chapter 7 bankruptcy. The six-year limitation may be waived in some situations, such as if all or a significant portion of unsecured debts have been repaid under the original Chapter 13 plan.
Going From Chapter 13 to Chapter 13 Bankruptcy
A Chapter 13 to Chapter 13 bankruptcy requires two years between the first and second case filings. Many people who need the automatic stay of a Chapter 13 bankruptcy wait until the end of their previous case to file. Again, this should be discussed at length with a knowledgeable bankruptcy attorney. Even people who are familiar with Chapter 13 filing should seek advice from someone who has a deep understanding of the law and bankruptcy courts.
Reasons for a Second Bankruptcy to Be Turned Down
The courts have the right to turn down any bankruptcy, particularly if the individual or couple filing for a discharge had a previous bankruptcy that was dismissed with prejudice. As the name implies, this type of bankruptcy dismissal does not look positive to a court because it means that the filer did not follow the letter of the law.
Financial Considerations Regarding Successive Bankruptcies
As a final note, anyone who has already filed for bankruptcy once and is thinking about doing it again may benefit from working with credit counselors. Often, the core reason for getting into debt time after time has to do more with financial habits than financial situations. Although a core element of filing for bankruptcy is undergoing credit counseling, extra information can be extremely helpful.
A smart practice for anyone who is going through bankruptcy or working out debts is to develop and use a household budgeting tool. Whether it is online or on paper, a budget helps map out money that is incoming versus expected expenses. Many people find that budgets can be easy to follow and keep them out of future debt.
Getting Help From a Bankruptcy Attorney in GA
Feeling as if you are drowning in debt that you cannot seem to pay off no matter how hard you try can be stressful and frustrating. It can also seem like a never-ending struggle. A big step you can take toward finding peace of mind and a viable solution is setting up an appointment with a bankruptcy attorney, even if you have a bankruptcy in your history.
Live in Georgia and thinking about filing a Chapter 13 or Chapter 7 case? Set up a free initial consultation with the Law Office of Jeffrey B. Kelly. Call (770) 809-3099.