Many people have this question. About a fifth of all bankruptcy debtors in Georgia have filed at least once before. Technically, the Bankruptcy Code does not limit the number of subsequent filings. But the automatic stay and debt discharge rules differ, as outlined below.

The Automatic Stay prohibits all creditor adverse actions, such as foreclosure and wage garnishment, while the case is pending. The discharge eliminates the legal obligation to repay a debt.

Regardless of the number of times you’ve failed, or haven’t filed bankruptcy in Athens, a Georgia bankruptcy lawyer does more than guide you through the process. Only an attorney can stand up for you in court if things start to go sideways. This risk is much higher among subsequent filers.

Why Do People File Bankruptcy More Than Once?

There is an old myth that lightning never strikes twice in the same place. That’s not true of lightning strikes, and it is certainly not true of the financial storms of life, such as:

• Divorce,
• Chronic illness,
• Serious injury,
• Job loss, and
• Economic downturn.

These events trigger most bankruptcy filings in Georgia. And, filing bankruptcy once does not make people immune to these things. In fact, these storms often feed each other. For example, the financial pressures of a job loss might strain a marriage to the breaking point.

Overspending causes or contributes to a number of first filings. Bankruptcy, especially Chapter 13 bankruptcy, helps these families for better financial habits. Alas, some people do not learn the lesson the first time or take full advantage of the tools they have to rework their finances.

Subsequent Filing Rules

Fasten your safety belt for this part of the post. As mentioned above, the subsequent filing rules are a bit complex.

Previous Dismissal

Debtors can voluntarily withdraw their bankruptcy petitions at any time. But voluntary dismissals could have collateral effects on subsequent bankruptcies. Likewise, bankruptcy judges can unilaterally dismiss cases if debtors misbehave. Common misbehaviors include refusing to obey a court order, missing a filing or other deadline, and refusing to cooperate with the trustee (person who oversees the bankruptcy for the judge).

Previous dismissals affect the Automatic Stay for 180 days. Exact rules vary in different jurisdictions. Generally, if the debtor had one previous dismissal in that time period, the Stay only applies if the debtor files a motion with the petition. Two dismissals in 180 days mean the Stay lapses after about a month. Three dismissals in the previous 180 days mean no Automatic Stay at all.

Things are even more complex if the filer used different names. Assume Ellen files bankruptcy and she voluntarily withdraws her petition. Immediately thereafter, Ellen’s husband files bankruptcy over basically the same debts. Technically, Ellen’s husband must file a motion, or else the Automatic Stay does not apply.

Incidentally, using different names and filing in different jurisdictions is evidence of bankruptcy fraud. That’s a much more serious issue.

Previous Discharge

Debtors who receive a discharge must wait a certain number of years before they can receive another discharge. The order of filing and type of bankruptcy both affect the waiting period, as follows:

• Chapter 7 Following Chapter 7: Eight Years,
• Chapter 13 Following Chapter 13: Two Years,
• Chapter 7 Following Chapter 13: Six Years, and
• Chapter 13 Following Chapter 7: Two Years.

These rules vary slightly in some cases. Assume Fred files Chapter 13. He pays off 70 percent of his unsecured debts during the protected repayment period. Fred might be eligible for a Chapter 7 discharge after three years instead of six years.

Note these rules only apply to subsequent discharges. The Freds of the world can file again at any time without penalty, assuming they are beyond the aforementioned 180-day dismissal window.

Let’s change the facts of this example a bit. Assume Fred files Chapter 7 bankruptcy because he has some past-due income taxes. The IRS objects to discharge and the judge rules against Fred. After Fred emerges from Chapter 7, the IRS moves to garnish Fred’s wages. 

Fred can file Chapter 13 bankruptcy to stop that wage garnishment. Additionally, because of Chapter 13’s protected repayment period, Fred has up to five years to pay off the tax debt. Fred is not eligible for discharge at the end of the repayment period. But, since he just received a Chapter 7 discharge and his back taxes are paid off, Fred probably doesn’t care about that fact.

Conclusion

While the Bankruptcy Code puts no restrictions on the number of bankruptcy filings, the automatic stay and debt discharge rules are different. You need to pay special attention to the subsequent filing rules to wade through the rough financial waters in your life. If you find this complex, it is a good idea to hire a reputed bankruptcy lawyer in Athens, Georgia, who will help you through the process and protect your rights during your trying times.  

Contact a Trustworthy Bankruptcy Attorney in Athens for Debt Relief

It is possible to encounter severe financial crises and debt-related issues more than once in your life. Fortunately, the Bankruptcy Code does not limit the number of subsequent filings, which means if the need for a subsequent bankruptcy arises, you will have legal options to get relief. However, this isn’t as easy as it sounds. For a free consultation with an experienced bankruptcy lawyer in Athens, contact Morgan & Morgan, Attorneys at Law P.C. at (706) 843-2905. We routinely handle matters in Clarke County and nearby jurisdictions.