Category Archives: personal bankruptcy attorneys

It’s legal to file as many bankruptcy cases as necessary, but there are rules about how often you can file. The U.S. Bankruptcy Code regulates multiple case filings, how long a filer must wait, and other specifics that we’ll cover in detail below.

The mandatory waiting period between filings depends on several factors, including:

The result of your first bankruptcy case: If you received a bankruptcy discharge for your first case, the waiting period before you can file again is different than if your previous case was dismissed without discharge.

The type of bankruptcy you filed before: Individuals and families generally file either Chapter 7 or Chapter 13 bankruptcy. The time limits before you’re allowed to file again differ depending on the chapter of your previous filing.

The chapter of bankruptcy you file the second time: The waiting period between bankruptcy filings is affected by both the chapter of the previous bankruptcy and the chapter you plan to file in the subsequent case. 

What’s the Mandatory Waiting Period Between a First and Second Bankruptcy Filing?

Under bankruptcy law, people can file for bankruptcy more than once to get the fresh start they deserve. The mandatory waiting period between bankruptcy cases depends on whether the first bankruptcy case was successfully discharged, whether your first bankruptcy case was a Chapter 7 (liquidation case) or a Chapter 13 (reorganization with repayment plan), and what chapter of bankruptcy your second filing will be.

Successful Discharge of First Bankruptcy Case

The two main types of personal bankruptcy are Chapter 7 and Chapter 13. Most individuals and families file Chapter 7 bankruptcy. This is the quickest form of bankruptcy. It’s also known as a liquidation bankruptcy, though the majority of filers get to keep most or all of their belongings. 

It makes more sense for some people to file for Chapter 13 bankruptcy. Under Chapter 13, your debts are reorganized and you pay on a repayment plan that lasts three to five years. This has benefits that Chapter 7 doesn’t. 

Filers receive a bankruptcy discharge at the end of a successful Chapter 7 or Chapter 13 bankruptcy case. The discharge is a bankruptcy court order that erases certain debts and means lenders can’t ever legally attempt to collect on discharged debts again. 

The following outlines when you can file bankruptcy again and be eligible for a second discharge. The clock starts ticking on the date you filed your first bankruptcy, not the date of discharge.  

Filing Chapter 7 After Chapter 7

You must wait eight years between Chapter 7 bankruptcy cases. To receive a second discharge, you must wait eight years from the date you filed your first successful Chapter 7 case until you can file your second Chapter 7 case.

Filing Chapter 7 After Chapter 13

You must wait six years between filing a Chapter 13 case and filing a Chapter 7 case. This timeline starts on the date you filed your first successfully discharged Chapter 13 case. Once six years pass, you can file a second bankruptcy case under Chapter 7. The six-year waiting period can be waived if you paid all of your unsecured creditors in full during the initial Chapter 13 bankruptcy payment plan. Unsecured debts include credit card debt, medical bills, and other debts not secured or backed up by property.

Filing Chapter 13 After Filing Chapter 7

You must wait four years to file a Chapter 13 bankruptcy case after filing a Chapter 7 case. This four-year waiting period only applies if you’re hoping to receive a second discharge of debt in your second bankruptcy filing.

In some instances, it might make sense for a person to file a Chapter 13 bankruptcy after receiving a discharge in a Chapter 7 but before the four-year waiting period has passed. This is because Chapter 13 bankruptcy requires you to follow a payment plan to repay your debts. This can help you to catch up on missed payments. 

As soon as you file bankruptcy, creditors must stop all collection activity against you because of the automatic stay. This means that filing for bankruptcy can stop a foreclosure, at least temporarily. A Chapter 7 bankruptcy can stop a foreclosure while a person is in bankruptcy, but if you want to keep your house you have to make your monthly payments and catch up on any missed payments. 

A Chapter 13 bankruptcy includes a repayment plan that allows you to make up any missed mortgage payments over a three-to-five-year repayment plan. During this repayment plan, generally, your house can’t be foreclosed. This is why some people file Chapter 13 even though they’re not seeking to have their debts discharged. In this case, it wouldn’t be necessary to wait four years between filings. 

Filing Chapter 13 After Chapter 13

You must wait two years between Chapter 13 bankruptcy cases. To receive a second discharge of debts in Chapter 13, you must wait two years from the filing date of your first successfully discharged Chapter 13 case until the filing date of your second Chapter 13 case.

All waiting periods between bankruptcy filings are calculated from the filing date of the first case, not the discharge date. 

First Bankruptcy Case Not Discharged

There is a difference between a bankruptcy case that’s discharged and one that’s dismissed. If your first bankruptcy case was dismissed, you didn’t receive a discharge so you may be able to file a second bankruptcy case immediately. When a bankruptcy case is dismissed without a discharge, it means that none of the filer’s debts are erased and they’re still obligated to pay back their debts. 

Bankruptcy cases can be dismissed if:

• You don’t appear at a required bankruptcy hearing, including the 341 meeting of creditors. 
• You fail to file all necessary documents properly and on time or fail to pay required bankruptcy filing fees.
• You don’t pay the required Chapter 13 plan payments.
• You aren’t truthful in your bankruptcy filing.

Depending on the reasons your case was dismissed, you may be able to file for bankruptcy protection again right away or you may need to wait before filing again. Under the Bankruptcy Code, you must wait 180 days to re-file a bankruptcy case if your first case was dismissed by the bankruptcy court for not following the court’s orders or appearing before the court when required. 

You may also need to wait 180 days before filing a second bankruptcy case if you asked for a voluntary dismissal of your first bankruptcy case after one of your creditors filed for relief from the automatic stay. This means that a creditor formally asked the court to let them continue collection activity against you even though you filed for bankruptcy protection. 

When people file a second bankruptcy case after a first case is dismissed, the court will evaluate if the bankruptcy was filed in good faith. Good faith means that you’re not trying to take advantage of the bankruptcy process. For example, if your first case is dismissed for failure to pay the necessary filing fee, it’s generally okay for you to file a second case immediately as long as you pay all necessary fees in the second case. 

Is It a Good Idea To File Bankruptcy a Second Time?

Filing for bankruptcy is a powerful debt relief tool. You’ll need to look at your financial situation to determine whether filing a second bankruptcy case is a good idea for you or not. Filing for bankruptcy will harm your credit score and negatively impact your credit report, at least in the short term. A Chapter 7 bankruptcy will stay on your credit report for 10 years from the filing date and a Chapter 13 bankruptcy for seven years. 

While bankruptcy can harm your credit, not filing can also be harmful due to missed payments, outstanding debts, and lawsuits for unpaid debts. If you’re facing a second bankruptcy after many years have passed, it’s important to explore why you’re in this situation again. Then take steps to ensure your financial well-being moving forward.

In some cases, it’s a good strategic financial move to file a second bankruptcy after a successful discharge. For example, you may benefit from filing a Chapter 13 after a Chapter 7 discharge to set up a repayment plan to pay off past-due mortgage payments to save your house, catch up on child support arrears, or pay tax debts that were too new to be discharged in your Chapter 7 bankruptcy case. In the case of child support arrears or back taxes, filing a Chapter 13 second bankruptcy could help you avoid wage garnishment and stretch out your repayment plan over three to five years. There are many valid benefits to filing a second bankruptcy case. 

Abusive Bankruptcy Filings

The bankruptcy court looks closely at cases that may be abusing the bankruptcy process. An abusive bankruptcy filing could be a Chapter 7 filer that fails the means test. It could also apply to cases where an individual is inappropriately using the bankruptcy process to avoid paying back a debt, avoid a creditor, or buy time in a collection action, such as a foreclosure or pending lawsuit for unpaid debt. 

The court frowns upon people who abuse the bankruptcy process or who have no intention of following through with their bankruptcy case. People who file multiple cases are more heavily scrutinized by the bankruptcy courts. Repeat filers may lose some of the benefits of bankruptcy protection. For example, the court may deny their discharge or revoke the automatic stay, which stops collection activity. 

If You’re Seeking a Second Financial Fresh Start, Get Professional Help

Filing bankruptcy can be complex — filing successive bankruptcies can be difficult, confusing, and financially dangerous if you don’t plan well. An experienced bankruptcy attorney can help guide you. Bankruptcy attorneys are well-versed in the pitfalls of bankruptcy and multiple filings, the advantages bankruptcy offers, and court requirements. Many bankruptcy lawyers offer free consultations. 

Many people who are struggling with debt start their debt relief journey with credit counseling. Pre-bankruptcy credit counseling can help you evaluate all of your debt relief options, including bankruptcy, debt consolidation, debt settlement, and other debt management options that may be right for you. Debt relief solutions are never one-size-fits-all. You need to know what’s best for you given your financial situation.

Below is a summary of filing fees for bankruptcy, the price of required credit counseling, and if you qualify for fee waivers or installment payments.

You have to pay filing fees and expenses for credit and debt counseling when you file for bankruptcy. You may be eligible for a fee waiver or be able to pay in installments if you are unable to pay the filing fee.

You can find a summary of what needs to be paid, when, and how to be eligible for installment payments or a fee waiver in this article.

Bankruptcy Petition Fees: Chapter 7 and Chapter 13 Filing Fees

The total amount of fees you have to pay in order to file for bankruptcy is as follows, as of December 1, 2020:

For Chapter 7, $338
For Chapter 11, $1,738
Chapter 12: $278; Chapter 13: $313
Periodically, the bankruptcy court raises these fees. The U.S. Courts fee webpage has the most recent fees available.

Chapter 7: Installments and Waivers of Filing Fees

The filing fee is usually due at the time your bankruptcy petition is filed. There are two exclusions from Chapter 7 bankruptcy, though. Asking the court to waive the fee completely or allow you to pay it in installments is an option.

Application for Installments of the Chapter 7 Filing Fee

You file Form 103A Application for Individuals to Pay the Filing Fee in Installments to request permission from the court to pay your filing fee over time. You must indicate on the form that you are unable to pay the fee in full and that you will make no more than four payments within 120 days of the petition’s filing.

Request for Waiver of Chapter 7 Filing Fee

If the court waives the fee, you are not required to pay it. If you are eligible for a fee waiver, you

must be unable to make payments in installments and have an income that is less than 150% of the federal poverty threshold (official poverty line estimates are available from your bankruptcy court).
Fill out Form 103B, Application to Have the Chapter 7 Filing Fee Waived, and send it in to request a fee waiver. In many cases, the judge will approve the application without requiring you to appear in person, but you may still be required to appear in court so the judge can question you.

See how to make changes to bankruptcy forms.

In Chapter 13, there are no fee waivers or installment payments.

Fee waivers and installment payments are generally not available to Chapter 13 filers because they must have sufficient funds to support a repayment plan for three to five years following filing for bankruptcy. When submitting the case, budget for the cost.

Extra Fees Associated with Bankruptcy Filing

Credit counseling from an authorized provider must be completed no later than six months prior to filing for bankruptcy under Chapter 7 or Chapter 13. To get your bankruptcy discharge (the order that eliminates qualifying debt), you have to complete a debtor education course after filing your case.

For the necessary counseling, the majority of approved credit counseling providers charge $15 to $30, but you might not be required to pay anything. In accordance with the law, agencies must offer counseling regardless of your financial situation, so please inform the agency if this is not possible for you.

Additionally, the debtor education classes run about $35. You can request that the provider waive the fee or let you pay a smaller amount if you are unable to pay the full amount.

How to Pay Your Attorney Fees in Bankruptcy

Since many bankruptcy attorneys charge as little as $100 to begin, finding a way to pay Chapter 13 bankruptcy fees is not too difficult; the remaining amount can be rolled into your Chapter 13 repayment plan. You can pay your Chapter 13 fees gradually with this method.

You must pay your attorney in full before filing for Chapter 7 bankruptcy. For what reason? because legal fees are eliminated in Chapter 7 bankruptcy. Your attorney won’t get paid if you don’t make the entire payment.

To file for Chapter 7, how do you obtain the necessary funds? Most Chapter 7 filers divert their payments intended for bill cancellation during bankruptcy to pay their attorney. The funds will be borrowed by others from friends and relatives.

But there are other approaches. If you are unable to pay for a bankruptcy attorney, you can find out more information here about your options.

Below is a summary of filing fees for bankruptcy, the price of required credit counseling, and if you qualify for fee waivers or installment payments.

You have to pay filing fees and expenses for credit and debt counseling when you file for bankruptcy. You may be eligible for a fee waiver or be able to pay in installments if you are unable to pay the filing fee.

You can find a summary of what needs to be paid, when, and how to be eligible for installment payments or a fee waiver in this article.

Bankruptcy Petition Fees: Chapter 7 and Chapter 13 Filing Fees

The total amount of fees you have to pay in order to file for bankruptcy is as follows, as of December 1, 2020:

For Chapter 7, $338
For Chapter 11, $1,738
Chapter 12: $278; Chapter 13: $313
Periodically, the bankruptcy court raises these fees. The U.S. Courts fee webpage has the most recent fees available.

Chapter 7: Installments and Waivers of Filing Fees

The filing fee is usually due at the time your bankruptcy petition is filed. There are two exclusions from Chapter 7 bankruptcy, though. Asking the court to waive the fee completely or allow you to pay it in installments is an option.

Application for Installments of the Chapter 7 Filing Fee

You file Form 103A Application for Individuals to Pay the Filing Fee in Installments to request permission from the court to pay your filing fee over time. You must indicate on the form that you are unable to pay the fee in full and that you will make no more than four payments within 120 days of the petition’s filing.

Request for Waiver of Chapter 7 Filing Fee

If the court waives the fee, you are not required to pay it. If you are eligible for a fee waiver, you

must be unable to make payments in installments and have an income that is less than 150% of the federal poverty threshold (official poverty line estimates are available from your bankruptcy court).
Fill out Form 103B, Application to Have the Chapter 7 Filing Fee Waived, and send it in to request a fee waiver. In many cases, the judge will approve the application without requiring you to appear in person, but you may still be required to appear in court so the judge can question you.

See how to make changes to bankruptcy forms.

In Chapter 13, there are no fee waivers or installment payments.

Fee waivers and installment payments are generally not available to Chapter 13 filers because they must have sufficient funds to support a repayment plan for three to five years following filing for bankruptcy. When submitting the case, budget for the cost.

Extra Fees Associated with Bankruptcy Filing

Credit counseling from an authorized provider must be completed no later than six months prior to filing for bankruptcy under Chapter 7 or Chapter 13. To get your bankruptcy discharge (the order that eliminates qualifying debt), you have to complete a debtor education course after filing your case.

For the necessary counseling, the majority of approved credit counseling providers charge $15 to $30, but you might not be required to pay anything. In accordance with the law, agencies must offer counseling regardless of your financial situation, so please inform the agency if this is not possible for you.

Additionally, the debtor education classes run about $35. You can request that the provider waive the fee or let you pay a smaller amount if you are unable to pay the full amount.

How to Pay Your Attorney Fees in Bankruptcy

Since many bankruptcy attorneys charge as little as $100 to begin, finding a way to pay Chapter 13 bankruptcy fees is not too difficult; the remaining amount can be rolled into your Chapter 13 repayment plan. You can pay your Chapter 13 fees gradually with this method.

You must pay your attorney in full before filing for Chapter 7 bankruptcy. For what reason? because legal fees are eliminated in Chapter 7 bankruptcy. Your attorney won’t get paid if you don’t make the entire payment.

To file for Chapter 7, how do you obtain the necessary funds? Most Chapter 7 filers divert their payments intended for bill cancellation during bankruptcy to pay their attorney. The funds will be borrowed by others from friends and relatives.

But there are other approaches. If you are unable to pay for a bankruptcy attorney, you can find out more information here about your options.

You won’t necessarily lose your home in Chapter 7 bankruptcy, especially if you don’t have much home equity and your mortgage is current. But it can happen. Whether you’ll lose your home after filing for Chapter 7 bankruptcy will depend on the following factors:

• whether your mortgage is current
• if you can continue making the payments after bankruptcy
• the amount of your home equity, and
• whether your state’s homestead exemption will protect all of the equity.

If you’re behind on your payment, in foreclosure, or can’t exempt all of your home equity, you’ll have a better chance of keeping your home using Chapter 13 bankruptcy. Filers faced with those circumstances should learn more about choosing between Chapter 7 or Chapter 13 when keeping a home.

Your Home and the Chapter 7 Bankruptcy Trustee

Chapters 7 and 13 work very differently, so it’s essential to understand what you must do to keep valuable property in Chapter 7. Here’s how it works.

After filing for Chapter 7, your property will go into a bankruptcy estate held by the Chapter 7 bankruptcy trustee appointed to your case. The trustee will sell property in the estate for the benefit of creditors.

However, you don’t lose everything you own.

You can “exempt” or remove property from the estate your state determined is reasonably necessary to maintain a home and employment. You’ll find out what you can keep by reviewing your state’s bankruptcy exemptions.

Here’s the tricky part—if you make a mistake, it’s unlikely that the bankruptcy judge will allow you to dismiss the case, and you could lose the house. So you must follow the rules carefully.

Are Your House Payments Current?

The automatic stay will temporarily stop a foreclosure when you file for Chapter 7. But if you’re behind on the mortgage payment when you file, the best you can hope for is delaying the process for a few months.

• Why filing won’t cure a default. Chapter 7 bankruptcy doesn’t provide a way for you to catch up on the overdue payments. This presents a problem because a mortgage is a secured debt, and Chapter 7 doesn’t erase the lien that gives the lender the right to take back the home if you don’t pay. The lender can foreclose after the automatic stay lifts, and you’ll lose the house.
• What will happen if you file. The lender can ask the court to lift the automatic stay to allow foreclosure proceedings to continue, which the court will likely grant if the trustee doesn’t plan to sell the home. Or, the lender can wait until the bankruptcy ends, proceed with foreclosure, and sell the house at auction.
• Chapter 13 bankruptcy can help. If you’re behind and want to keep your home, the better option is to file a Chapter 13 case. Unlike a Chapter 7 bankruptcy, Chapter 13’s repayment plan provides a way for you to catch up on mortgage arrearages. Also, if you have more equity than you can protect with a homestead exemption (more below), you can prevent a home loss by paying your creditors the value of the nonexempt equity through the plan.

Can You Continue Making House Payments After Chapter 7 Bankruptcy?

It’s also essential to be sure you can afford to continue paying the mortgage after a Chapter 7, because losing the house after your case might put you in a worse financial position. Why? If the lender couldn’t sell the home for the amount you owe, you’d be stuck with a deficiency balance depending on the laws of your state.

Worse yet? You’d have to wait eight years to file a second Chapter 7 bankruptcy, leaving the lender plenty of time to collect a deficiency balance using collection methods such as garnishing your wages or levying on a bank account.

How Much Equity Is in Your Home?

If your mortgage payment is up-to-date, your next step will be determining how much equity exists. You’ll start by valuing your home.

Next, subtract any outstanding mortgage balance from the home value to get your “equity.” The equity is the amount you’d have in your pocket after selling the house and paying the mortgage.

If you don’t have any equity, you’re in good shape. Trustees don’t sell houses without equity. Otherwise, you’ll need to be able to protect your equity with a bankruptcy exemption to avoid losing the home in Chapter 7 bankruptcy.

Learn more about filing for bankruptcy if you have equity in your home.

Can You Protect Your Home Equity With Bankruptcy Exemptions?

State exemption statutes list the property its residents can protect in bankruptcy. Some states allow residents to choose between the state exemption list or the federal bankruptcy exemption scheme. Either way, almost all states allow residents to protect some home equity with a homestead exemption. You might be able to exempt even more with a wildcard exemption.

If your exemptions adequately cover your equity, the trustee won’t sell your home in a Chapter 7 bankruptcy. However, if your exemptions protect only a portion of it, the trustee will sell the house, pay off the mortgage, give you the amount you’re entitled to exempt, and use the remainder of the sales proceeds to pay creditors.

Although you can’t figure costs into your equity determination, the trustee will consider costs before selling the home. If, after deducting sales costs, the amount remaining isn’t enough to make a meaningful payment to creditors, the trustee will abandon the property, and you’ll get to keep it.

Source

https://www.nolo.com/legal-encyclopedia/lose-home-file-chapter-7-bankruptcy.html

Filing for bankruptcy could affect your life in both positive and negative ways. The main negative in declaring bankruptcy is that the debtor’s credit score will take a major hit. While it’s very much possible to restore a bad credit score, many consumers do wonder what it means for immediate financial assistance requirements. For example, if you don’t own a home and have filed for bankruptcy, does that mean you are ineligible for a mortgage now and for how long?

The question is not easy to answer. Personal circumstances and specific situations can matter. It’s best to first get advice from a qualified bankruptcy lawyer in Scottsdale. However, consumers can also get a general idea of obtaining a home loan following bankruptcy by reading this article.

Qualifying for a Home Loan Following Bankruptcy

There are no legal barriers to qualifying for a home loan following a bankruptcy declaration. A lender cannot deny you a mortgage based solely on the fact that you have filed for bankruptcy once. Lenders will use other underwriting factors to determine your eligibility.

A consumer’s ability to get a home loan following bankruptcy is determined largely by the credit score, monthly income, down payment levels and the remaining savings. Keep in mind that mortgage lenders require a down payment on the loan. If you have no trouble paying for the down payment, then you can quite often also qualify for the loan. If not, you should at least be able to pay 20 percent of the down payment right away. The higher the down-payment one can offer a lender, the higher the chance that your mortgage loan will close and fund on the date of purchase.

How Bankruptcy Affects Credit Scores and Eligibility for Home Loans

You should expect your credit to plummet by at least 120 points if you file for bankruptcy. All of the credit monitoring companies scan the bankruptcy dockets every day to watch consumers.  After you are discharged from your bankruptcy case, you will need to soon start rebuilding credit to prevent going into the negatives. If you start repaying remaining debts that survived your bankruptcy, your credit score will rise without a problem. Rehabilitating credit in this manner is the best option you have for being qualified for a subsequent home loan. Even if your credit score is low, if you can show the lenders that it has been improving, then your mortgage application may receive more favorable treatment during the loan application process.

How to Improve Your Chances of Obtaining a Home Loan Following Bankruptcy

First of all, you should take steps to get your credit score back up. If you filed for Chapter 13 bankruptcy, sticking to the monthly court-approved payment plan should do it. Otherwise, you can get a credit card and make timely payments without missing a single payment due.  Pay on time, each and every month.

Start saving. You should certainly expect to spend some time-saving money before you can apply for a mortgage. Let your savings accumulate so you have enough to at least partially cover a down payment. The more savings you have, the better your application will look.   You can get friends or family to help you accumulate down payment funds as well, so long as they are willing to sign off and release those funds to you in writing.

Don’t forget to repay existing loans such as student loans, taxes owned, or child support. Always continue to timely pay your regular bills on time as well.

What matters is that you maintain a good financial profile by not falling back into the previous circumstances that caused you to file for bankruptcy.  Time is your friend.  After a bankruptcy, the longer you have come through and demonstrated a strong credit history and ability to pay—the mortgage lenders will start to consider you again for home mortgage loan qualifications.