Just because someone files for bankruptcy does not necessarily mean that he or she will not be in financial trouble in the future. Fortunately, it is possible for those who have filed for bankruptcy in the past to do so again in certain circumstances. There are, however, limitations to this rule, so if you filed for bankruptcy on a prior occasion and have questions about filing again, you should speak with an experienced Iowa bankruptcy lawyer who can evaluate your case and advise you accordingly.
Who Can File for Bankruptcy Multiple Times?
Whether a person can file for bankruptcy multiple times depends on how long ago he or she filed for bankruptcy the first time and the type of bankruptcy proceedings in which he or she was involved. For instance, individuals whose debts were discharged under Chapter 7 in the past eight years cannot obtain a discharge through Chapter 7 proceedings again until that time period has passed. Petitioners are also prohibited from requesting a discharge of their debts under Chapter 13 if they:
- Received a Chapter 7 discharge within the last four years; or
- Received a Chapter 13 discharge less than two years ago.
It is possible in some cases, however, for individuals to file for Chapter 13 bankruptcy before the four year time limit has passed. For instance, those who are not seeking to discharge their debts can file Chapter 13 bankruptcy, even if they filed for chapter 7 less than four years ago. This is a common scenario in situations where a person files for Chapter 7 proceeding to discharge unsecured debts and then to file Chapter 13 soon after to address non-dischargeable taxes or mortgage debts. These are known as Chapter 20 proceedings and allow qualifying individuals to use both types of bankruptcy to clear what they owe to creditors.
There are a few exceptions, which allow certain individuals to file bankruptcy claims before the required time has elapsed. If, for instance, a court discharged a person’s debts under Chapter 13 bankruptcy, that individual would normally have to wait six years before filing for Chapter 7 bankruptcy. It would not be necessary to wait that long, however, if the filer:
- Paid all of his or her unsecured creditors in full in the Chapter 13 case; or
- Paid at least 70 percent of his or her unsecured claims and the repayment plan was proposed and executed in good faith.
Those who never received a discharge in their first bankruptcy case may also have the option of filing for bankruptcy a second time and having their debts discharged. If, for instance, a court dismissed a filer’s case, he or she could file for bankruptcy again, although the individual may have to fulfill a 180 day waiting period if the case was dismissed because:
- The petitioner failed to obey a court order;
- The petitioner failed to appear; or
- The petitioner voluntarily dismissed the case.
If, on the other hand, a court denied the discharge of a debt, a person may have a harder time filing for bankruptcy again and even if successful, could still be barred from the discharge of the debts listed in the earlier case. Finally, repeat filers are at risk of losing the full benefits of the automatic stay, or the order that prohibits collectors from seeking repayment of a debt.
Call Today for Help with Your Case
If you have questions about your eligibility to file for bankruptcy, please reach out to the Telpner Peterson Law Firm, LLP at 712-309-3738 to speak with one of our dedicated Iowa bankruptcy lawyers about your options.