How Often Can You File for Bankruptcy if You Require Bankruptcy Protection Again?
Once every 8 years, a debtor is permitted to receive Chapter 7 Bankruptcy Protection. The time frame begins from the time of filing until the time of the second bankruptcy case is filed with the court. Life does take unexpected turns. Losing a job, illness, and injuries are unforeseeable events, which can show increasing debt once you have already filed for Chapter 7 Bankruptcy Protection. You can file for Chapter 13 Bankruptcy Protection to resolve your debts. Chapter 13 Bankruptcy Protection permits you to receive a discharge 4 years by filing a Chapter 7 Bankruptcy case. This will shorten the time frame by 4 years. Chapter 13 is a payment plan; however, the income situation is the same to what it was when the original Chapter 7 case after paying the bills like living expenses which means there is little to no money left to cover the essential bills.
One instance a Chapter 13 Bankruptcy case can be accepted by a Bankruptcy court or Trustee with a low payment per month based on deminimus income from the debtor. The method the low payment plan of Chapter 13 would be employed by paying a minimal amount of money per month for 36 months based on whatever amount the debtor has left over after the debtor pays for his essential bills. After the 36 months plan, the remainder of the debit is discharged such as in the original Chapter 7 Bankruptcy case.
Now, however, if problems do occur within 4 years of the filing of the original Chapter 7 Bankruptcy case, the Chapter 13 may be employed to halt any type of collections by the creditor. Remember, the remainder balance of the debt will not be discharged. There is another purpose in filing a Chapter 13 filed after a Chapter 7 may indicate some protection when the debtor files the Chapter 7 which discharges the debt and afterwards is behind on the mortgage of the home. The term used is Chapter 20. A Chapter 20 is an unofficial characterization of this type of case. There is no bad faith. A Chapter 20 can save your home, but paying the mortgage payment that was outstanding for 5 years.