Very few people file bankruptcy more than once, and those who do are more likely to be seeking relief other than a discharge, such as stripping an underwater second mortgage in Chapter 13 or using the automatic stay to halt a collection proceeding or foreclosure. However, some people do need to file more than once for a discharge, but they are concerned about the time limits the bankruptcy code places on their eligibility for a discharge. Here are five facts to bear in mind about the future eligibility for a discharge.
- Chapter 7 discharges aren’t allowed for eight years after the previous filing, and for Chapter 13 the time limit is two years.
- Although, the situation can become confusing when cases are converted from one chapter to another. What’s the time limit when a case is filed in Chapter 13 but converted to Chapter 7? The answer, according to the bankruptcy code, is that a discharge won’t be granted for a case that’s “commenced” within eight years. Thus a Chapter 13 case that’s filed within eight years and converted to a Chapter 7 will not be eligible for a discharge.
- Of course, debtors can file again in Chapter 7 without the goal of obtaining a discharge.
- Debtors can, however, file in Chapter 13 four years after their Chapter 7 filings and still obtain a discharge. The idea is that it’s pretty hard to obtain large amounts of debts in that time period, and hopefully the debtor will be able to repay most of the creditors within a five-year plan.
- As a result, while it may be possible to file a Chapter 13 bankruptcy shortly after a Chapter 7 and still receive a discharge, it will probably be useless to convert the Chapter 13 case to Chapter 7, even if it would otherwise be beneficial to do so.
It’s important for those who have had their debts discharged before to try to find out what Chapter they filed in if they seek to do so again. The difference can make the difference between obtaining a discharge again or not.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-299-6719 to set up your free consultation.