Can I File for Bankruptcy More Than Once?

The financial storms of life trigger most personal bankruptcy filings, and in most cases, these storms hit more than once. Medical bills are a good example. Excessive medical bills cause about two-thirds of bankruptcy filings, and most people get seriously ill or injured more than once. So, even if they make some financial changes in their lives, many people must file for bankruptcy more than once. As outlined below, these distressed debtors usually have legal options.

Whenever your family is in severe financial distress, whether it is the first time or a subsequent time, you can count on a Northwest Indiana bankruptcy lawyer. An attorney quickly evaluates your case and determines your legal options. Additionally, only an attorney knows about some obscure bankruptcy loopholes which can save your family thousands of dollars and help prevent a future financial crisis from happening.

Serial Filing

The serial filing rule, which varies in different jurisdictions, may be the biggest roadblock to multiple bankruptcy filings. In a nutshell, if the court believes the debtor is trying to game the system, the court could unilaterally dismiss the bankruptcy, leaving the debtor in an even worse financial position.

Fortunately, this hammer usually does not fall immediately. Instead, most judges take a more measured approach, as follows:

• One Prior Filing: Usually, if the debtor has filed before and shows cause that a new filing is necessary, the bankruptcy proceeds as usual. Generally, “cause” is any excuse better than my cat being sick.
• Two Prior Filings: To avoid dismissal, these debtors must normally show good cause. That is a step above cause, so these debtors must normally submit detailed affidavits outlining their need to file bankruptcy again.
• Three Prior Filings: Truthfully, at this point, there is little a Gary bankruptcy lawyer can do, especially if the debtor has filed twice in the previous six months.

Other violations of the serial filer rule have little or nothing to do with the number of filings. If Alan files bankruptcy, Alan’s wife files bankruptcy over basically the same matters, and Alan files bankruptcy again, the judge will probably require Alan to show good cause for that filing. The same thing applies if Mary files bankruptcy and then, over basically the same financial matters, Mary, LLC files bankruptcy.

Waiting Periods

Unlike the serial filing rules, the waiting period rules are basically set in stone. The waiting period depends on the type of first foiling and the type of second filing.

People who file Chapter 7 must wait eight years to file another Chapter 7 and four years to file a Chapter 13. People who file Chapter 13 must wait six years to file a Chapter 7 and two years to file a Chapter 13. These waiting periods usually affect the kind of petition a Gary bankruptcy lawyer may file on your behalf.

“Chapter 20” Bankruptcies

Strictly speaking, the waiting periods do not affect the ability to file for bankruptcy. The waiting periods only apply to subsequent bankruptcy discharges. Sometimes, people do not need discharges. They simply need to extend the Automatic Stay and get more time to pay their debts. A Chapter 20 (7 plus 13 is 20) may be an option in these cases.

Assume Lisa tries to eliminate past-due taxes in a Chapter 7, but she does not qualify for discharge under the complicated rules. In many jurisdictions, Lisa could file a Chapter 13 as soon as the judge closes her Chapter 7. Lisa will not be eligible for a discharge, but she does not need a discharge since she just got one. She just needs more time to pay off her past-due taxes.

Contact a Tough-Minded Lake County Attorney

Whatever financial stress your family faces, bankruptcy may be a way out. For a free consultation with an experienced bankruptcy lawyer in Gary, contact Whitten & Whitten. We routinely handle matters throughout Indiana.