Can You File Second Bankruptcy Petition After Discharging a Prior Case?

Bankruptcy is a complex area of law with significant consequences for individuals. As a result, individuals generally have numerous questions and concerns prior to filing a bankruptcy petition. However, it’s not uncommon for individuals to file a second bankruptcy petition after previously receiving a discharge. Unfortunately, many individuals find themselves in significant debt years after receiving a discharge due to unfortunate life circumstances, such as unexpected medical bills.

Thankfully an individual can file a second bankruptcy petition and still receive a discharge. However, there are certain time limitations on how often an individual can file a subsequent bankruptcy petition and still receive a discharge. In the following we will explore the time limits for filing a second bankruptcy petition while still being able to obtain a discharge of debts as well as provide answers to your bankruptcy questions.

First Case Chapter 7, Then Second Case Chapter 7

The most common second petition filing request our law firm receives is when an individual has previously filed a Chapter 7 case, and would like to file a second Chapter 7 case. Pursuant to 11 U.S.C. § 727(a)(8), if an individual received a discharge under Chapter 7, then he or she cannot receive a second Chapter 7 discharge unless the second case was filed more than eight years from the date of the initial Chapter 7 case.

First Case Chapter 7, Then Second Case Chapter 13

So, what happens if the time between Chapter 7 cases hasn’t been eight years? Well, a Chapter 7 debtor may be able to file a Chapter 13 case and still receive a discharge. Pursuant to 11 U.S.C. § 1328(f)(1), if an individual received a discharge under Chapter 7, then he or she cannot receive a Chapter 13 discharge unless the Chapter 13 case was filed more than four years after the initial Chapter 7 case.

First Case Chapter 13, Then the Second Case Chapter 7

So, what if the Debtor filed a Chapter 13 case and received a discharge, but now wants to file a Chapter 7 case? Pursuant to 11 U.S.C. § 727(a)(9), if an individual received a discharge under Chapter 13, then he or she cannot receive a Chapter 7 discharge unless the second case was filed more than six years from the date of the initial Chapter 13 case.

Notably, there is an exception to the six-year rule. If in the previous Chapter 13 case, the individual repaid all allowed unsecured creditors in full, or at least 70% of the allowed unsecured claims and the plan was proposed in good faith and with the debtor’s best efforts, then you can file for Chapter 7 sooner.

First Case Chapter 13, Then the Second Case Chapter 13

If the prior Chapter 13 debtor cannot qualify for a subsequent Chapter 7 case, then the debtor may be required to file a second Chapter 13 case. Pursuant to 11 U.S.C. § 1328(f)(2), if an individual received a discharge under Chapter 13, then he or she cannot receive a second Chapter 13 discharge unless the second case was filed more than two years from the date of the initial Chapter 13 case.

First Case Chapter 11, Then Second Case Chapter 7

The vast majority of individual clients do not file for Chapter 11 bankruptcy relief. This is because most individuals do not have the necessary assets or claims to qualify for Chapter 11 bankruptcy. Notwithstanding, our firm has represented several individuals that have sought Chapter 7 bankruptcy relief, following a prior Chapter 11 case. Pursuant to 11 U.S.C. § 727(a)(8), if an individual received a discharge under Chapter 11, then he or she cannot receive a Chapter 7 discharge unless the second case was filed more than eight years from the date of the initial Chapter 11 case.

First Case Chapter 11, Then Second Case Chapter 13

Pursuant to 11 U.S.C. § 1328(f)(1), if an individual receives a discharge in a Chapter 11 bankruptcy case, then he or she cannot receive a subsequent Chapter 13 discharge unless the Chapter 13 case was filed at least four years after the initial Chapter 11 case.

What If the First Bankruptcy Was Dismissed Without a Discharge?

If an individual’s first bankruptcy was dismissed, then he or she may file again without a time constraint. The individual should be aware however, that if the bankruptcy was dismissed within one year, then the automatic stay will only last for 30 days, unless the individual debtor can demonstrate good faith for an extension, 11 U.S.C. 362(c)(3)(B).

If said individual is filing a second or third bankruptcy within the past year, then they should immediately call a bankruptcy attorney as the individual may not receive the benefits of the automatic stay.

In conclusion, there are many nuances in bankruptcy concerning time limits and pending debts and so it is good practice to do your research and consult with professional counsel in such matters.

Written by Guillermo J. Gonzalez, Esq.

Bankruptcy Attorney, Scura, Wigfield, Heyer, Stevens & Cammarota, LLP. Mr. Gonzalez represents individuals and corporate entities in bankruptcy, commercial litigation, corporate transaction matters, and cannabis law.

https://www.scura.com