Depending on your financial situation, you may need to file bankruptcy. But what if you have already filed before? Are you able to file again? How often can you file for chapter 11 bankruptcy?
Continue reading to find out how often you can file bankruptcy. And if there are rules that you need to comply with before filing again.
Chapter Comparison In Bankruptcy
When you find yourself debating on whether or not you should file bankruptcy, you may also be curious about the different ways to file.
There are multiple chapters to consider when filing bankruptcy.
Chapter 7 bankruptcy requires you to liquidate all of your assets and use the money to pay back your creditors. The debt leftover after you pay your agreement is dismissed.
You can’t qualify for a chapter 7 bankruptcy if you make too much money. The state will look at your income and compare it to the state minimum. If you do not meet the income requirement, you will not be able to file chapter 7 bankruptcy.
Chapter 11 bankruptcy is different than chapter 7. A chapter 11 bankruptcy does not require you to liquidate your assets before making a plan to repay your debts. It can be appealing to those who want to keep their stuff.
A chapter 11 bankruptcy is typically used for businesses. But individuals can also file chapter 11. If you can file chapter 7, you should also be able to file chapter 11.
A chapter 11 bankruptcy will reorganize your funds and create a plan to pay back the debt owed. Once the agreement has been implemented and fulfilled, the remaining balance is dismissed.
A chapter 13 bankruptcy is similar to a chapter 11 bankruptcy. Those who qualify for chapter 13 will have income coming in. But the debts that they owe are too high to keep paying. Repayment plans are created to pay back the creditors that you owe.
Your debts are put into two categories, priority and non-priority.
Priority debts are paid off completely, these include taxes and auto loans. Non-priority debts are only paid off partially, these debts include credit cards and medical bills.
If your salary is too high to pass the means test, this may be the best option for you.
How Often Can You File Bankruptcy?
Now that you are familiar with how each chapter in bankruptcy works, you can decide which one may be right for you. If you have previously filed but may need to file again, you may need to find out if you qualify to file a second time.
There is no limit on how many times you can file bankruptcy of any chapter. But, you do need to qualify. There are time limits in place between bankruptcies. These limits keep people from abusing the system.
If you have filed a chapter 7 bankruptcy and were discharged of remaining debt, you can file chapter 7 again in 8 years.
If you have filed a chapter 7 bankruptcy and were discharged of remaining debt, you can file chapter 11 anytime.
If you have filed a chapter 7 bankruptcy and were discharged of remaining debt, you can file chapter 13 in 4 years.
If you have filed a chapter 11 bankruptcy and were discharged of remaining debt, you can file chapter 7 in 8 years.
If you have filed a chapter 11 bankruptcy and were discharged of remaining debt, you can file chapter 11 again anytime.
If you have filed a chapter 11 bankruptcy and were discharged of remaining debt, you can file chapter 13 in 2 years.
If you have filed a chapter 13 bankruptcy and were discharged of remaining debt, you can file chapter 7 in 6 years.
If you have filed a chapter 13 bankruptcy and were discharged of your remaining debt, you can file chapter 11 anytime.
If you have filed a chapter 13 bankruptcy and were discharged of your remaining debt, you can file chapter 13 again in 2 years.
Complexity In Bankruptcy
Bankruptcy isn’t something to take lightly. Many factors should be considered before applying for bankruptcy of any chapter. There are consequences to filing, such as a hit to your credit.
It may take years to rebuild your credit after a bankruptcy. And you may still be obligated to pay back debts. Bankruptcy isn’t a quick cure-all decision. The courts will look at your situation and decide the best route. Depending on their decision, you may lose more than you wanted.
Bankruptcy options should be looked at individually, to see if they would benefit you. If you aren’t sure where you stand, it is best to ask for help.
Hiring A Bankruptcy Attorney
Looking at the information about bankruptcy and the various options available is a lot to understand. You want the best help on your side to assist you with making the best choice. Hiring a bankruptcy attorney is a great decision.
A bankruptcy lawyer will explain in detail the types of bankruptcy available for you and if you are a good candidate. They will walk you through the steps and assist you every step of the way.
Should You File More Than Once?
If you have been through bankruptcy, then you understand better than others. It is a complex process that isn’t just a clean slate. You have to work toward a goal and comply with the rules provided.
You may have to liquidate assets to pay creditors or repay debts with a payment plan. Your credit score is impacted for years, and it can take a while to start rebuilding.
While these repercussions may hinder a thriving environment, they can be great for a fresh start. Life is full of growth, and part of growing is making mistakes.
Having the option to file bankruptcy multiple times may give you the ability to try new businesses or experience life in new ways, allowing you to learn and grow along the way.
Contact The Elmer Law Firm in Jasper, Tuscaloosa, and West Alabama to speak with an experienced bankruptcy attorney.