Many people in California have filed for bankruptcy protection, perhaps to discharge their credit card bills, medical expenses, or stop foreclosure on their home. After successfully completing a Chapter 7 or Chapter 13 case, obtaining a discharge order will feel like a fresh start. However, as you are rebuilding your life, you might experience additional and unexpected hurdles, including a job loss, illness, or simply coping with the increasingly high cost of living. If your bills start to pile up again, are you allowed to file another bankruptcy?
There are no limits on how many bankruptcies you can file in California. However, there are limitations as to when you are permitted to file another case. The exact answer depends on the chapter of bankruptcy you filed, the chapter you are planning to file, and whether you received a discharge or not.
Bankruptcy often feels intimidating. However, it is the best option available for a person struggling with overwhelming debt in many cases. Some people who have filed are reluctant to travel that path again because they are embarrassed or are unaware that it is an option. The experienced Roseville, CA bankruptcy attorneys at The Bankruptcy Group are here to help you if you are filing again or are considering filing for the first time. Call our law offices at 1-800-920-5351.
Bankruptcy Filing Limitations in California
As stated above, there is no limit to the number of bankruptcies an individual could file in the state of California. However, restrictions are limiting when you can file another case if you want to obtain another discharge.
The objective of filing for bankruptcy is to eliminate or reorganize your debt. Most people will file either Chapter 7 or Chapter 13. If you received a discharge, meaning you successfully completed your bankruptcy, the Bankruptcy Code imposes time restrictions on when you are allowed to file another case and still receive a discharge. The time periods depend on what chapter you filed and what chapter you wish to file.
If you originally received a discharge in a Chapter 7 case, you need to wait eight years before filing another Chapter 7 bankruptcy. Now, if you want to file Chapter 13, you must wait four years to be eligible for a discharge.
If your original case was filed under Chapter 13 and you want to file another Chapter 13 bankruptcy, you need to wait two years. If you are looking to file Chapter 7 after obtaining a Chapter 13 discharge, you must wait six years.
These dates are not calculated from your discharge, but from the petition filing date. For instance, if you filed for Chapter 7 on May 1, 2020, and received a discharge, you must wait until May 1, 2028, to file another Chapter 7 case. However, if you filed a Chapter 13 on May 1, 2020, you only have to wait until May 1, 2026, to file a Chapter 7 case.
Filing Another Bankruptcy in California Within the Required Waiting Period
The waiting period applies to people who are looking to file a bankruptcy to obtain a discharge. Therefore, you are permitted to file for bankruptcy and not receive a discharge. While this might not sound like a good idea, there are times when it is necessary.
For example, a person might file a Chapter 7 case and discharge their unsecured debt. Two years later, that same individual falls behind on their mortgage because they were unemployed for several months. Even though the eight years have not passed, they are entitled to file a Chapter 13 case to address their mortgage arrears. A Chapter 13 bankruptcy could be the only option available to stop foreclosure. While the mortgage could be paid back through the bankruptcy plan, the debtor would not be able to discharge any unsecured debt incurred since the previous case. Our Huntington Beach bankruptcy attorneys are available to discuss the benefits of filing for bankruptcy without obtaining a discharge.
Filing Another Bankruptcy After Your Chapter 13 Case is Dismissed
When you file for Chapter 13, you commit to making trustee payments for three to five years. If you miss any payments during your case, a court-appointed trustee will file a motion to dismiss your case. It is not unusual for a Chapter 13 debtor to have their case dismissed for payments. Additionally, a case could be dismissed for other reasons, including failure to file documents or provide copies of tax returns. If your Chapter 13 case is dismissed, are you allowed to file another one? The answer is yes. However, there are conditions.
If your Chapter 13 was dismissed for payments, the first thing our Orange County bankruptcy attorneys will look at is how many cases you had within the previous year. You could file another case if it was only one, but our office will have to file a motion to extend your automatic stay beyond 30 days. The automatic stay is the legal barrier between you and your creditors. This injunction is what protects you from your creditors while you are in bankruptcy. When you file another case after a dismissal order, the stay is only in place for 30 days. The debtor must demonstrate to the court that a change in their circumstances will increase the likelihood that the new case will succeed. The most common change in circumstances is additional income, either through employment or contributions from friends or family members.
If you had two cases dismissed within one year, the stay does not go into effect when your new case is filed. Now our office must file a motion to have the stay imposed. The burden of proof is much more significant. You must show the court that you are filing the present case in good faith. If you have had multiple cases dismissed, you need our knowledgeable California Chapter 13 lawyers working on your case.
If You Need to File a Second or Third Bankruptcy, Contact Our California Bankruptcy Lawyers
Bankruptcy often helps people regain their financial footing. However, there are times when circumstances or bad luck put a person in the position where they need to file again. At The Bankruptcy Group, our Sacramento bankruptcy lawyers understand many people need an additional bankruptcy. If you are looking to file another case or if your current case was dismissed, call our law offices at 1-800-920-5351.