There are cases in which a debtor files bankruptcy more than once.
When the economy began to decline and unemployment was on the rise, those who lost their jobs faced difficult financial choices. Many people used their credit cards to pay for bills and other expenses and racked up significant debt. Many of those people are still unemployed. These individuals are candidates for Chapter 7 bankruptcy.
Some people find themselves in a position to file Chapter 7 bankruptcy more than once. Iowa bankruptcy lawyer Kevin Ahrenholz explained that a debtor’s prior bankruptcy may create a problem in attempting to file again, depending on the filing date of the debtor’s prior bankruptcy.
While there is no limit to the number of times someone can file Chapter 7 bankruptcy, there are limits on whether an individual can receive a bankruptcy discharge from their case. Changes made to the bankruptcy code in 2005 mean that debtors are required to wait eight years before they can receive another debt discharge in a subsequent Chapter 7 bankruptcy. It is important to note that the relevant date is the date that the debtor’s prior bankruptcy petition was filed. For instance, if an individual filed Chapter 7 bankruptcy on October 1, 2006, they cannot file Chapter 7 bankruptcy again until for eight years, until October 1, 2014. The debtors who filed in 2008, when the economy started to decline, do not yet have the opportunity to file Chapter 7 bankruptcy and receive a debt discharge. However, they may be able to file a Chapter 13 bankruptcy.
A Chapter 13 bankruptcy is a court-supervised debt repayment plan, during which debtors receive protection from creditors, and make monthly payments to a trustee for a period of three-to-five years. Upon the successful completion of the plan, they receive a discharge of any remaining unsecured debt. If the Chapter 13 debtor becomes eligible to file a Chapter 7 bankruptcy while their Chapter 13 case is pending, they may convert the case from a Chapter 13 to a Chapter 7, when the eight-year waiting period has passed..
Each debtor’s debt relief options depend upon a variety of factors and circumstances. Speak to a qualified Iowa bankruptcy attorney to find out what those options and considerations are, as well as how and when to take advantage of them.