If you have read much at all on my bankruptcy blog you will no doubt be familiar with my mantra – “no one wants to file for bankruptcy”. And while I believe that to be true, some people find themselves in a situation where they have filed multiple bankruptcies in a very short period of time.
Some may read that and be thinking “wait, I thought you could only file chapter 7 bankruptcy once every eight years”. It is true that you can only receive a chapter 7 discharge of your debts once every eight years, but you can file a chapter 7 bankruptcy as often as you like – you just won’t get a discharge of your debts each time.
Usually the people filing multiple times in a relatively short period of time tend to be filing a chapter 13 bankruptcy. Chapter 13 bankruptcy is usually more suited to people who are trying to deal with the problem of being behind on house payments. Chapter 13 bankruptcy will give you up to five (5) years to get caught up on your payments.
As with a chapter 7 bankruptcy it has the benefit of the Automatic Stay. This is the Order that is given by the bankruptcy court that stops all collections against you after your bankruptcy case has been filed. However, if you have filed a prior bankruptcy case in the past year that was dismissed, this protective stay may only be there for a limited time or not at all. Here is how it works:
- 1 Prior Bankruptcy Case Filed in the Past 12 Months – If you have had an active bankruptcy case of any chapter in the last 12 months, the Automatic Stay is only good for thirty (30) days. This means if you have a foreclosure pending on your house and you file a second bankruptcy case within a 12 month period that there is a good chance that the bankruptcy court will only delay things for 30 days and then the bank will be able to move forward with the foreclosure sale. However, a written request can be made to the judge asking the judge to extend the Automatic Stay so long as the request is made within the 30 day time period and the court sets and holds a hearing within that same 30 days.
- 2 Prior Bankruptcy Cases Filed in the Past 12 Months – If you have had 2 active bankruptcy cases of any chapter in the last 12 months there is no Automatic Stay. This means that even if you file for bankruptcy a bank could proceed with a foreclosure sale on your home without having to ask for the court’s permission. Again, the bankruptcy code allows you to ask the judge to put a stay in place if it can be shown that your third bankruptcy was filed in good faith, but if you can’t then there is no Automatic Stay.
It is important to understand how multiple filings can impact your case and your ability to stop foreclosure sales, garnishments, or other levies. The main thing to remember is if you are in danger of losing your home or having your wages garnished get a bankruptcy lawyer involved early so that you will know the best options available to you and you can avoid a bankruptcy that may do little for you.
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John Skiba, Esq.
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