Declaring bankruptcy can sometimes be the best way to move forward after severe financial hardship. Individuals, sole proprietorships, and partnerships often opt to file a Chapter 7 bankruptcy claim to discharge certain debts and start over. But if you have experienced financial hardship more than once, can you file another type of bankruptcy claim? The answer is yes. It is possible to file for Chapter 13 bankruptcy after previously filing for Chapter 7 bankruptcy. However, there are specific rules and timeframes you need to be aware of before filing for Chapter 13 bankruptcy after Chapter 7. In this post, the Pakpour Banks LLP team will explain the legalities, waiting period, and consequences of filing Chapter 13 bankruptcy after you have already filed Chapter 7. Contact us today to speak to a California bankruptcy lawyer.
Eligibility for Filing Chapter 13 Bankruptcy After Chapter 7
In California, as in other parts of the United States, there are specific rules and timelines for filing Chapter 13 bankruptcy after previously filing Chapter 7 bankruptcy. All jurisdictions use federal bankruptcy law, keeping the process consistent nationwide. We will cover each of the critical sections of bankruptcy law that may apply if you are considering filing Chapter 13 bankruptcy when you have previously filed for Chapter 7 protection.
Time Between Filings
There is a waiting period that you must observe before filing your second bankruptcy claim. According to the U.S. Bankruptcy Code, you must wait at least four years from the date of filing Chapter 7 to file for Chapter 13. Alternatively, if you previously filed for Chapter 13 and want to file for Chapter 7, you generally need to wait six years before filing another bankruptcy claim.
To be eligible for Chapter 13 bankruptcy, you must meet specific criteria. One of the most critical items to consider before filing a Chapter 13 bankruptcy is that you must have a regular income to fund a repayment plan. Depending upon the circumstances of your past financial hardship, your previous bankruptcy may affect your ability to qualify for Chapter 13. Be sure to consult with a qualified bankruptcy attorney to assess your eligibility.
Consequences of Filing a Second Bankruptcy Claim
Filing a Chapter 13 bankruptcy after previously filing a Chapter 7 bankruptcy comes with both benefits and drawbacks. We will explain some more about what you can expect if you choose to make a second bankruptcy filing below.
Filing Chapter 13 after Chapter 7 can be beneficial if you have debts not discharged in your Chapter 7 case. These items often include certain tax debts or domestic support obligations like alimony and child support. Chapter 13 can help you address these non-dischargeable debts. Speak with a member of the Pakpour Banks team to discuss whether a Chapter 13 bankruptcy may suit your circumstances.
In Chapter 13 bankruptcy, you will create a repayment plan to pay off a portion of your debts over three to five years. This is different from Chapter 7, where most of your debts are discharged without repayment.
How to File Chapter 13 After Chapter 7
If you want to file a second bankruptcy claim, the process generally involves the following steps.
Consult an Attorney
First, consult with a bankruptcy attorney who can evaluate your specific financial situation and advise you on the best course of action. While a Chapter 13 bankruptcy might make sense for some, a skilled attorney can assess your situation and advise whether you may be eligible for less restrictive means of paying your debts. They may be able to help you achieve payment plans or settlements directly with creditors, bypassing the need for a second bankruptcy filing.
Gather Financial Information
Prepare a list of your assets, debts, income, and expenses. This information will be necessary for filing the Chapter 13 petition. By having it on hand, you can save yourself time and hassle.
Attend Credit Counseling
Before filing for Chapter 13 bankruptcy, you must complete credit counseling from an approved agency. Your attorney can help you find a suitable agency.
File a Chapter 13 Petition
Your attorney will help you prepare and file the necessary paperwork for Chapter 13 bankruptcy. This includes the petition, schedules, and a proposed repayment plan.
Meeting of Creditors
You will be required to attend a meeting of creditors, where your creditors can ask questions about your financial situation and proposed plan. Sometimes, debtors do not know how to handle these meetings and worry they will lose their composure or not know what to say. A bankruptcy attorney can help you navigate creditor meetings and act as your advocate throughout the process.
After the meeting of creditors, a confirmation hearing will be scheduled where the bankruptcy court will review and approve your repayment plan. Once your repayment plan is approved, you will need to make regular payments to the Chapter 13 trustee for the duration of the plan, which typically lasts three to five years. Upon successfully completing the repayment plan, you may receive a discharge of any remaining eligible debts.
Get Good Advice
Remember that bankruptcy laws can be complex and vary by jurisdiction, so it is crucial to seek professional legal advice before proceeding with any bankruptcy filing, especially if you have previously filed for bankruptcy. An attorney can help you handle the process and ensure that you properly meet all legal requirements.
Speak to a California Bankruptcy Lawyer Today
Your financial health matters. When facing extreme financial hardship, trust Pakpour Banks LLP to help see you through a bankruptcy hearing and get you back on track. With an experienced bankruptcy law attorney from Pakpour Banks LLP negotiating on your behalf, you may be surprised by the options available to you to discharge your debts and start over. Even when it seems like there is no end in sight to the financial difficulties, our knowledgeable legal team can help you obtain the peace of mind you deserve. Contact us today to learn more.