How Long Do You Have to Wait Between Filing Bankruptcy in Pennsylvania?
Over the years, bankruptcy has helped millions of people save themselves from financial trouble. Despite the skepticism shown by some, bankruptcy has provided the necessary tools to fight off excess debt. People who have obtained a bankruptcy discharge may be inclined to file for another chapter. Many times, this is due to unforeseen financial issues. You may ask whether you can file for multiple bankruptcies or not. Additionally, you might wonder how previous bankruptcies affect your ability to file again.
How long you must wait to file again depends on the chapter you filed and what happed in the previous case. If you received a discharge in a Chapter 7 bankruptcy, you typically need to wait eight years before filing again. After a successful Chapter 13 bankruptcy, a debtor must wait six years to file a Chapter 7 or two years to file a Chapter 13 – unless they paid off all their debts. However, if the court dismissed your case, you could be eligible to file the same day. You could also file a Chapter 13 for another reason, such as stopping foreclosure, while not eliminating any unsecured debt.
Timing is the critical factor when deciding to file for another bankruptcy, especially if you are switching from one chapter to another. Our Pennsylvania bankruptcy lawyers from Young Marr & Associates invite you to keep reading as we discuss how much time you have to wait in filing bankruptcy. If you have any bankruptcy questions, contact our law offices at (215) 701-6519.
How Long Should I Wait Between Bankruptcy Filings in PA?
Bankruptcy is an excellent way to manage excess debt, especially for those struggling financially due to things such as credit card debt. Throughout the years, millions of people have witnessed the benefits of bankruptcy and have also experienced a new financial beginning. Unfortunately, not everybody has the fortune of getting out of debt successfully. For these people, bankruptcy may still be an option. While nothing in bankruptcy law prevents you from filing again, timing your filing may be the best option for you. There is a reason behind waiting for re-filing for bankruptcy. If you file bankruptcy soon after a first discharge, you may not be able to obtain a second one right off the bat.
Timing is essential when filing bankruptcy again. For instance, eight years must have passed from the moment you filed your first Chapter 7 bankruptcy. Generally, your Chapter 7 discharge will remain in your credit history for ten years. The good news is you may file a second Chapter 7 two years before your discharge disappears. This means you will not have to wait ten full years to file another Chapter 7.
On the other hand, Chapter 13 bankruptcy does not require an extended waiting time before filing for a second one. Petitioners who have filed for Chapter 13 before, have to wait two years before being able to file for an additional one. These time frames seem straightforward. However, timing can change if you decide to switch from one bankruptcy chapter to another.
For example, if you obtained a discharge under Chapter 7, but are now trying to file for a Chapter 13, you will need to wait for a period of four years from the original Chapter 7 filing. However, if you got a discharge under Chapter 13, and are now attempting to file for Chapter 7, the waiting period would be six years from the original Chapter 13 filing unless you have paid all of your unsecured debt following the principle of good faith. It is important to remember that you can file for bankruptcy even without a discharge. There may be instances where you can identify an old debt that gets in the way of obtaining a bankruptcy discharge, such as overdue taxes.
Filing Another Bankruptcy if My Chapter 13 Case Was Dismissed
Chapter 13 bankruptcies are difficult and many are dismissed before a debtor completes their three to five years of monthly payments. A case could be dismissed for failing to file documents, missing trustee payments, or not proposing a feasible plan. When this happens, debtors have options.
If you only have one previous case, you could file another Chapter 13 immediately. However, you must file a “motion to extend the automatic stay.” This is because the injunction that goes into effect when you file only lasts 30 days if it is your second Chapter 13 within a calendar year. In the motion, our Philadelphia bankruptcy lawyers will have to provide evidence that your new case will likely succeed. This typically requires showing that you are making more money or that your expenses have significantly decreased.
If you have two previous bankruptcies in the same calendar year, the automatic stay does not go into effect. In this case, a debtor must file a “motion to impose the automatic stay.” There is a greater burden of proof on the debtor to show that they are in an improved financial position. Multiple filings are a common problem when someone tries to file a case on their own. If someone tries to file for bankruptcy and only seeks legal assistance after two or more dismissals, they could find themselves in a position where bankruptcy is not helpful or viable. Bankruptcy is a complicated legal process. Mistakes have far-reaching consequences. If you need to file for bankruptcy because you are overwhelmed with debt or your home is in foreclosure, talk with one of our sympathetic Allentown bankruptcy attorneys before taking action on your own.
Why Should I File for Bankruptcy in Pennsylvania?
Despite saving millions of people from financial catastrophe over the years, bankruptcy is a concept not everybody understands. It is understandable to feel apprehensive about the whole process as it can get incredibly complex and overwhelming. This is especially true for first-time petitioners. Unfortunately, many people only focus on the stress bankruptcy may bring into their lives. For this and other reasons – such as social stigma – many people may reject the possibility of filing bankruptcy.
The truth is bankruptcy can be more beneficial than many may think. For instance, bankruptcy’s primary purpose is assisting debtors in getting rid of excess debt. Filing bankruptcy can put you on the right track towards financial recovery. People generally file a Chapter 7 or Chapter 13 bankruptcy – the most common types of consumer bankruptcies. Chapter 7 or liquidation bankruptcy is one of the most common types of bankruptcy people file for. This is mostly due to its efficacy in fighting off unsecured debt. Unsecured debt refers to a debt not guaranteed by collateral. Medical bills, credit card debt, and rent payments are common examples of unsecured debt. Obtaining a discharge means you may be able to get rid of most or all of your unsecured debt.
On the other hand, Chapter 13 – another common type of bankruptcy – allows debtors to get rid of excess debt by designing a three to a five-year repayment plan. Once your creditors and the court have approved your repayment plan, you will start paying your debt. A trustee will divide your payments equally among your creditors for the duration of your plan. Once you complete your Chapter 13 process, you may obtain a discharge. However, it would be best if you remembered to comply with all the rules and regulations laid out in your plan. Any delays or missed payments can hurt your bankruptcy case.
In addition to discharging your debt, bankruptcy can also provide you with a valuable benefit. As soon as you file for bankruptcy, you obtain the protections provided by the “automatic stay.” The automatic stay works as an injunction against collecting actions. In other words, your creditors cannot knock at your door looking for payment while your bankruptcy process is underway. Furthermore, the automatic stay can also protect your home and car from mortgage foreclosure and repossession, respectively. This can give you the opportunity to keep your home and your car during bankruptcy and save them from being taken away by your creditors.
When Should I File for Bankruptcy in Pennsylvania?
While there are specific waiting times to file for bankruptcy if you have filed before, the question of “when to file” is still important – whether you have filed before or if this is your first time.
Income Considerations in Chapter 7 and Chapter 13
The means test looks at your household income for the previous six months before you file for bankruptcy. The means test serves two purposes. First, it is used to determine your average monthly income to see if you qualify for Chapter 7. It is also used to calculate your disposable monthly income to determine what your monthly payment to unsecured credits should be in Chapter 13. Both calculations will significantly impact your bankruptcy.
Chapter 7 is designed for people with limited income and assets. Therefore, your household income must be below a specific threshold to be eligible to file. The applicable household income is described as the “median income” for your geographical region. When completing the means test, our Philadelphia bankruptcy attorneys will include all your household income, including your salary, your spouse’s income, unemployment benefits, tax refunds, and any contributions from friends or family members.
This same income will be used to calculate your monthly disposable income in a Chapter 13 bankruptcy. Most people file for Chapter 13 for a specific reason, such as mortgage foreclosure, tax debt, or other secured debts that must be paid in the bankruptcy. In many cases, a Chapter 13 debtor could still discharge their unsecured debt unless they have disposable monthly income. A debtor’s disposable monthly income, as determined by the means test, must be paid to their unsecured creditors. This amount is in addition to any mortgage arrears or tax debt they are also paying. For example, a debtor might have to pay $450 a month to pay back their mortgage company to keep their house. In addition to their mortgage arrears, the debtor has $45,000 of unsecured credit card debt. If their disposable monthly income is $250, they will have to pay an additional $250 a month towards their unsecured debt.
Managing Income and Timing When Filing for Bankruptcy
In some cases, when a debtor files a bankruptcy could impact their ability to file a Chapter 7 or make a Chapter 13 more expensive. Our Philadelphia bankruptcy lawyers will often suggest timing your filing to best benefit your needs.
For instance, if you receive an end-of-the-bonus, you probably want to file your bankruptcy so the bonus is not included in your six months of household income. Some debtors have control over their overtime. Refraining from working overtime for a few months could qualify you for Chapter 7 or make your Chapter 13 more affordable. If you just lost your job, you might want to wait a few months so your old income will not be part of the calculation.
These considerations do not exist in a vacuum. Unfortunately, there are times when you do not have control of when you need to file. For instance, if your house has a listed sheriff’s sale date, delaying your filing might not be possible. Also, you might want to file before a creditor obtains a judgment or repossesses your vehicle. It is important to be honest and open with our Bethlehem bankruptcy attorneys so we can assist you.
Our Pennsylvania Bankruptcy Lawyers are Here to Help
If you or someone you know is going through financial hardships and is considering filing for bankruptcy, we can help. Backed by years of experience handling bankruptcy law cases, our Pennsylvania bankruptcy attorneys can assist you through the entire process. At Young Marr & Associates, we understand the difficulties associated with financial hardship. That is why we strive to provide you with dedicated, skilled, and quality legal representation to all of our clients. Do not let a bad financial situation take over your entire life. Let our experienced attorneys assist you during this trying time. To schedule a free, confidential consultation, call our law offices today at (215) 701-6519.