O'Brien Law Firm, LLC - Bankruptcy

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The ins and outs of filing for bankruptcy protection again

Anyone in Mississippi or any other state must wait for eight years before filing for Chapter 7 bankruptcy again. This means it’s not possible to file for this same type of bankruptcy, which is popular because it wipes out most debt within months of the initial filing and approval, until the eight year period is up. Technically, there aren’t limits on how many bankruptcy cases someone can file, but there are limitations on when this type of protection can be sought after a previous bankruptcy was successfully filed and completed.

With Chapter 7, the eight-year limit between filings is pretty much set in stone. If a debt holder wishes to go from Chapter 7 to Chapter 13, however, it’s possible to file for Chapter 13 bankruptcy after Chapter 7 is discharged. The stipulation is that four years from the initial Chapter 7 filing date must have passed first. Going from Chapter 13 to Chapter 7 requires a six-year wait after a Chapter 13 debt is discharged.

However, it is possible for a debtor that started off with Chapter 13 to file for Chapter 7 earlier if they’ve paid off 70 to 100 percent of their unsecured debt. The debtor must also prove they’ve made their best effort to stick to their repayment plan. In some instances, the court may extend the period that another bankruptcy can be filed by an individual if a previous bankruptcy was “dismissed” but not “discharged.” A court may also issue what’s termed a 180-bar to prevent refiling if a debtor fails to follow court orders or commits bankruptcy fraud.

An attorney generally recommends that debtors consider a fresh financial start with bankruptcy only as a last resort. If a Chapter 7 filing was already completed and debt issues still exist, a lawyer may suggest considering Chapter 13 if a client isn’t able to wait eight years to file for Chapter 7 again. An attorney may also be able to help a debtor in the middle of a Chapter 13 bankruptcy convert to Chapter 7 if they aren’t able to keep up with the repayment plan.