How Often Can You File for Chapter 13 Bankruptcy in Pennsylvania?
Some people still struggle after completing a Chapter 13 bankruptcy. An unexpected medical condition, job loss, or divorce could send someone into a financial tailspin – even if they managed to alleviate their previous economic difficulties through a prior bankruptcy filing. Fortunately, most people have the right to filing for protection under the Bankruptcy Code a second time. However, there are some time restrictions. If you received a discharge in your Chapter 13 bankruptcy, you are required to wait two years from the filing date of the previous case before you are eligible to receive an additional discharge. Below, we will look at this requirement in more detail.
Chapter 13 bankruptcies are difficult and require a debtor to pay their available disposable income to a court-appointed trustee. Because many debtors are struggling, they miss payments and their cases get dismissed. While there is no statutory cap on the number of subsequent Chapter 13 cases a person is entitled to file, specific requirements must be met.
The decision to file for bankruptcy is hard. Similarly, completing a Chapter 13 bankruptcy is also hard. The experienced Philadelphia bankruptcy attorneys at Young, Marr, Mallis & Associates understand the difficulties filers face. Our goal is to provide the legal assistance and guidance necessary to complete your case. If it takes more than one attempt, our office is here to help. Call (215) 701-6519 to discuss the necessary steps to file another bankruptcy.
Filing Another Chapter 13 Bankruptcy After Receiving a Discharge
The crucial thing to remember when talking about filing another Chapter 13 case after receiving a discharge is that the filing dates control. Therefore, if you filed for Chapter 13 and received a discharge, you are required to wait two years from the filing date of your previous case to be eligible for another discharge. To illustrate this point, if you file for Chapter 13 on January 1, 2020 and receive a discharge, you must wait until January 1, 2021 to file another case. However, in nearly every Chapter 13, a discharge order is only entered after the completion of a three or five-year plan. Therefore, this restriction rarely, if ever, comes into play.
If you want to file a Chapter 7 case after receiving a Chapter 13 discharge, the waiting period is longer. Generally, you must wait six years from the original filing date to be eligible for a discharge. However, this time limit is waived if you paid 100% to your unsecured creditors in your previous case. Still, as most Chapter 13 cases last five years, the practical waiting period is only one year.
Filing a Chapter 13 Bankruptcy After a Dismissal
A more common occurrence is a filer having to file another Chapter 13 after their case was dismissed. Chapter 13 cases are dismissed for various reasons, including missing monthly payments, failing to file documents, or submitting an infeasible plan. In many situations, it is possible to file another case immediately after one is dismissed. However, there are some statutory requirements based on the number of previous cases.
One Chapter 13 Case in the Previous Year
It is not uncommon for a debtor’s case to be dismissed for failure to make their required payments. A filer’s finances are usually stretched thin and one or two unexpected expenses could derail a case. Once a debtor falls behind, it is often difficult or impossible to catch up. When a case is dismissed for payments, a debtor has the option to file a new case.
It is necessary to review the automatic stay before discussing what happens when a case is dismissed. When someone files for bankruptcy, an injunction goes into effect prohibiting creditors from taking any action against the filer. If a dismissal order is entered, a debtor loses the protection afforded under the automatic stay. This means that a foreclosure could continue or a creditor could enforce an older judgment.
If the debtor only had one bankruptcy case pending during the previous calendar year and they file another case, a temporary stay goes into effect for thirty days. The debtor is required to file a motion with the court to extend the stay past thirty days. Our Pennsylvania bankruptcy lawyers will have to show that your circumstances have changed, proving that the new case would be more likely to succeed. For example, you might have received a raise, paid off a car, or otherwise decreased your expenses. Typically, you will have to show the Bankruptcy Court that you have additional income to complete the new case.
Two or More Chapter 13 Cases in the Previous Year
If you have two or more Chapter 13 bankruptcies in the previous year, the burden of proof becomes much higher. A debtor will have to prove by clear and convincing evidence that they are filing the case in good faith and that there is a significant change in circumstances that will allow the debtor to complete the new case. More importantly, the automatic stay does not go into immediate effect – even temporarily. Our Pennsylvania bankruptcy attorneys will have to file a motion to impose the stay. Until a judge rules on the motion, your creditors are free to proceed with their collection activities.
Voluntarily Dismissed Chapter 13 Cases
Every debtor has the right to voluntarily dismiss their Chapter 13 case at any time. In most instances, the same restrictions apply to filing a new case. However, if a creditor obtained relief from the automatic stay in your case, you must wait six months before filing a new case if you want to include the creditor who obtained relief. For example, a mortgage company would file a motion for relief if you fell behind in your mortgage payments. Once relief is granted, the mortgage company is permitted to move forward with a foreclosure or sheriff’s sale. At this point, your current bankruptcy is not protecting you. You might believe you can just voluntarily dismiss your case and start again. Unfortunately, you will have to wait six months to include your mortgage company. It is critical to keep in constant contact with our Pennsylvania Chapter 13 bankruptcy attorneys during your case – especially if you have fallen behind in trustee or mortgage payments.
Call Our Experienced Pennsylvania Bankruptcy Lawyers to Discuss if You Need to File Another Chapter 13 Case
No one wants to file multiple Chapter 13 bankruptcy cases. Unfortunately, there are times when it is necessary. It is crucial to have Young, Marr, Mallis & Associates’ experienced Bucks County bankruptcy attorneys working on your behalf if you need to file another case. Call (215) 701-6519 to review the steps to file another case.