Can I Refile for Bankruptcy If I Did Not Finish My First Bankruptcy?
Bankruptcy can be a long and complex process. Chapter 7 cases typically take about four to six months to complete, while Chapter 13 can take anywhere from three to five years. When a case is open for such a long time, anything could happen to interrupt the process. If you don’t complete the filing process the first time around, can you still file a second time? Our bankruptcy attorneys explore the options.
Reasons for Bankruptcy Dismissals
There is no such thing as a partial bankruptcy: you either receive a discharge, or you don’t. Dismissal or denial can terminate a bankruptcy case before a discharge is obtained. There are many different reasons a case may be denied or dismissed against a debtor’s wishes:
- You missed a deadline
- You included inaccurate or fraudulent information on your paperwork when you were filing
- You didn’t complete the credit counseling requirement
- You hid your assets in an attempt to protect them from repossession
- You didn’t go to the meeting of creditors, also known as the 341 meeting
- You failed to make the payments you outlined in your Chapter 13 repayment plan
- You didn’t file all the forms you were supposed to
- You didn’t pay the appropriate filing fees
- You destroyed or concealed your financial records
- You went against a court order
- You didn’t show up for a court date
Unfortunately, a denial or dismissal is generally bad news for the debtor. Instead of enjoying the benefits and protections of bankruptcy, like debt relief and the automatic stay, the debtor is essentially “back to square one” with his or her creditors and financial obligations.
Thankfully, even if your first case wasn’t discharged, you can generally still file again if necessary.
Restrictions on Refiling Bankruptcy
The lack of a discharge in the original case is actually an advantage in terms of time. This is because there are time limits on multiple bankruptcy cases which resulted in a discharge: eight years between Chapter 7 cases, two years between Chapter 13 cases, six years to go from Chapter 13 to Chapter 7, and four years to go in the opposite direction. If you never obtained a discharge for your original case, you are not bound by these waiting periods. This means you can file again whenever you wish, provided the court does not order otherwise.
However, some restrictions may still apply. For example:
- If your last case was dismissed due to failure to appear or non-compliance with a court order, you must wait 180 days to file a second time.
- If your last case was denied, it is unlikely that you will be able to obtain a discharge for the debts associated with that case.
You also need to understand that refiling after a dismissal may also affect the automatic stay, which is very important because of its role in protecting debtors from collection actions during a bankruptcy. If your previous case was dismissed within the previous year, and you file for the second time, the automatic stay will only last for 30 days. If you want this protection period to last longer than 30 days, your bankruptcy lawyer can help you file a motion to extend the stay. Since the stay will only last for one month without a modification, this motion should be filed as soon as possible, ideally within several days.
If you had two bankruptcy dismissals during the previous year, there is no longer any automatic stay at all, meaning you have zero protection against your creditors. Needless to say, this is not a good position to be in. Fortunately, it may be possible to be granted a stay if, within 30 days of filing your new case, you can persuade the judge that the new case was not filed in bad faith.
Bad faith essentially means that you filed with unethical ulterior motives. Bankruptcy is intended to help people overcome insolvency, so if a debtor files for some other, unapproved purpose, such as getting out of a debt or contract, then he or she may be deemed to be acting in bad faith. Unfortunately for people who file frequently, opening multiple cases is often assumed to be a sign of bad faith.
By comparison, good faith means a debtor acts with honesty and sincerity, and doesn’t abuse the bankruptcy system for personal gain. To maximize your chances of being interpreted as acting in good faith:
- Your repayment plan should be accurate, comprehensive, and financially feasible.
- You should be completely, consistently compliant with all court orders.
- You should not miss any deadlines or court appearances.
- You should not engage in any fraud or deceptive practices.
Pennsylvania Bankruptcy Lawyers Offering Free Consultations
If you are thinking about filing or refiling in Pennsylvania or New Jersey, an experienced bankruptcy attorney can help walk you through the process. To set up a completely free and confidential case evaluation, call Young, Marr & Associates today at (609) 755-3115 in New Jersey or (215) 701-6519 in Pennsylvania. You can also contact our law offices online.
☑ Been paying credit card balances that seem to never go down?
☑ Lost your job and are now having trouble keeping up?
☑ Attempted to work out a payment arrangement to no avail?
☑ Been notified of a mortgage foreclosure action?
☑ Been denied for a mortgage or other line of credit?
If the answer to any of these questions is “yes” then bankruptcy may be an option that you should consider.