Once someone receives a bankruptcy discharge and a fresh start, they imagine things will only improve. For the vast majority of people, that is true. However, for others, the bills and financial obligations start building up again. After they have taken advantage of a California bankruptcy, people facing another economic setback wonder if they could file another bankruptcy. The short answer is yes. However, there are certain limitations. Our California bankruptcy attorney takes a closer look at filing another bankruptcy below.
The Ability to File More than One Bankruptcy in California
It is not uncommon for someone to file for bankruptcy in California. Actually, California has more people filing for bankruptcy each year than any other state. The majority of these cases are consumer bankruptcies, either Chapter 7 or Chapter 13 cases. For many people, bankruptcy provides a financial fresh start and they never experience similar economic troubles again. However, there is a percentage of people who once again find themselves in need of bankruptcy’s benefits. Also, some people experience a setback during their chapter 13 case, resulting in a court dismissal. Both bring up questions on when and how a person in California can file another bankruptcy.
Fortunately, the bankruptcy code allows people to file one, two, three, and even more bankruptcies if they are necessary. Unfortunately, there are limitations and restrictions. Along with mandatory waiting periods, there are additional restrictions for people if they need to file multiple bankruptcies in succession.
Filing Consecutive Chapter 7 or Chapter 13 Bankruptcies in California After Discharge
When examining the ability to file a second bankruptcy, we have to look at several factors. The first important piece of the puzzle is whether or not you received a discharge. Then, the next consideration is what chapter of bankruptcy did you file originally.
Chapter 7 is the most common consumer bankruptcy filing. Known as a liquidation bankruptcy, debtors who qualify for Chapter 7 typically eliminate all their unsecured debt in a few months. Once you have obtained a discharge through Chapter 7, you will be required to wait at least eight years before you are eligible for another discharge. The period starts from the date your previous bankruptcy petition was filed – not the date of your discharge.
Chapter 13 bankruptcies are more complicated and last for three to five years. If you have received a Chapter 13 discharge, you are entitled to another in only two years. Unlike Chapter 7, this time limit begins at the date the discharge order has been entered. Legally, you could file a Chapter 13 sooner, without the benefit of a discharge. While rare, there are times this might be required, for example, if your mortgage lender foreclosed on your home. While you could not benefit from a full discharge, you could still use the bankruptcy to halt the foreclosure action and pay back your mortgage company.
In California, Can I File a Different Chapter of Bankruptcy if I Received a Discharge in Another Chapter?
You are not restricted to filing only one type of bankruptcy. If you filed a Chapter 7 and received a discharge, you could file a second bankruptcy under Chapter 13. However, the time restrictions are different.
If a debtor received a discharge in Chapter 7, then they must wait four years from the original filing date to file a Chapter 13 bankruptcy. However, the same caveat from above is still in effect – the debtor could file sooner and just not receive the benefit of a discharge.
If you successfully completed a Chapter 13 bankruptcy, you must wait six years from the filing date to be eligible to receive a discharge through Chapter 7. Exceptions do exist; if you paid 70% of your debt through your Chapter 13 you might be allowed to file another bankruptcy sooner. These situations are considered case by case, so be sure to discuss the facts of your situation with our knowledgeable Sacramento Chapter 7 bankruptcy attorney.
What if My Bankruptcy Case Was Dismissed? Can I File a Second Bankruptcy in California?
Chapter 13 bankruptcies are difficult and not every debtor who files successfully completes their bankruptcy plan. If your California bankruptcy case is dismissed you generally can file another bankruptcy. However, there are restrictions based on your specific circumstances.
Debtors who have one Chapter 13 dismissal within a calendar year are permitted to file another bankruptcy. The problem is that the automatic stay that protects debtors from creditors only goes into effect for 30 days. After filing the second Chapter 13, a debtor must file a motion to extend the stay. This motion must convince the court that the case was filed in good faith and that there was a change in the debtor’s financial circumstances that will allow them to complete the new bankruptcy case successfully.
If there are two dismissals in a calendar year, the stay does not go into effect, and the debtor must file a motion to impose the stay. Under these circumstances, the court will take a stricter look at the debtor’s situation. It is crucial to talk with our Sacramento Chapter 13 bankruptcy attorney if you have had multiple bankruptcies dismissed.
To Learn More About Filing A Second Bankruptcy, Call Our California Bankruptcy Attorney for a Free Consultation
Bankruptcy provides California residents with a powerful tool to eliminate debt or restructure their financial obligations. In some situations, despite a person’s best efforts, they may require those benefits an additional time. Other times, unforeseen circumstances result in a debtor’s case being dismissed. In either situation, you are permitted to file another bankruptcy case. Our experienced Roseville bankruptcy attorney will help you understand the limitations and restrictions in filing a second case. Call The Bankruptcy Group at (800) 920-5351 to schedule a free consultation to review your situation in detail.