May 27th, 2013

How Many Times Can I File Bankruptcy?

The  Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) went into effect in October 2005. It closed loopholes in the Bankruptcy Code and made it more difficult for some consumers to file bankruptcy under Chapter 7. For example, BAPCPA created the “means test” to force higher income debtors to file Chapter 13 and make payments to the bankruptcy trustee.

Among the many differences between Chapter 7 and Chapter 13 include the limitations on the number of bankruptcies an Arizona bankruptcy lawyer can file for a debtor:

(1)  You cannot file another Chapter 7 until 8 years have lapsed since your previous Chapter 7 filing.  The 8-year period starts ticking from the date you filed your previous Chapter 7. Many people filed Chapter 7 right before BAPCPA went in effect in October 2005 to avoid having to comply with the more rigorous BAPCPA requirements. As such, many Arizona bankruptcy lawyers believe that a wave of Chapter 7 filings may be coming right after October 2013 because that will be around the 8-year mark since many people filed their last Chapter 7.

(2)  You cannot obtain a discharge in a Chapter 13 case if you either (a) obtained a discharge in a Chapter 7 case filed within the past 4 years, or (b) obtained a discharge from a Chapter 13 case filed within the last 2 years. However, you can always file Chapter 13, even if you are ineligible for a discharge. For example, if you are behind in mortgage or car payments, or you need to come up with a plan to pay off your IRS taxes, you can file Chapter 13 to implement the automatic stay and to come current on such debts over the course of 3 – 5 years.  Note that you may have to obtain court authorization to keep the automatic stay in effect if you’ve had a prior bankruptcy case dismissed in the last 12 months.

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