Technically, debtors may file Chapter 13 bankruptcy as often as they want. However, if you’re wondering how often can you file Chapter 13, you should know that multiple filings might affect what is known as the Automatic Stay and the discharge order. Since these are the two biggest reasons people file Chapter 13, a subsequent filing is not always a good idea.

Many businesses rely on repeat customers, but at Morgan & Morgan, our Georgia bankruptcy lawyers never like to see repeat customers. The financial storms of life, such as job loss and divorce, usually prompt bankruptcy filings. We cannot prevent these storms, but we can give debtors the tools they need to effectively weather these storms.

Benefits of Filing Bankruptcy in Georgia

Chapter 13 gives debtors a chance to repay secured debt arrearage, such as past-due home mortgage payments, on their own terms. The protected repayment plan, which lasts up to five years, is the biggest benefit of bankruptcy.

During the protected repayment period, the trustee (person who oversees the bankruptcy for the judge) collects a monthly debt consolidation payment from the debtor. The trustee then distributes this money in accordance with a certain legal formula. As long as the monthly payments eliminate all secured debt arrearage and certain other obligations, such as administrative and legal fees, before the protected repayment period ends, creditors usually cannot successfully object to it. In other words, moneylenders must wait for their money like everyone else.

Additionally, while it adversely affects your credit rating, the effect is not as bad as some people believe. That’s because bankruptcy, especially Chapter 13 bankruptcy, indicates that the debtor is taking control of his/her finances. Things like repossession and foreclosure have a much greater negative impact. These events indicate that the debtor gave up.

Multiple Filings and the Automatic Stay in Georgia

Section 362 of the Bankruptcy Code prohibits most kinds of creditor adverse actions, such as the aforementioned repossessions and foreclosures. Most people intend to take full advantage of the Automatic Stay and all the other benefits of bankruptcy. But for various reasons, some people are unable to see things through to the end, and the judge dismisses their petitions.

James Bond author Ian Fleming once wrote that once is happenstance, twice is a coincidence, and thrice is enemy action. So, multiple filings within six months usually affect the Automatic Stay as follows:

• One Prior Dismissal: Almost anything can happen once. So, if debtors have one prior dismissal on their records, for whatever reason, a Georgia bankruptcy lawyer simply must file a motion to extend the Stay contemporaneously with the petition. Judges usually grant these motions without giving them a second thought.
• Two Prior Dismissals: Contrary to popular myth, lightning sometimes strikes twice in the same place, but these events are rare. So, in the motion to extend the Stay, a Georgia bankruptcy lawyer must show cause, which is essentially any reason other than “my cat was sick.”
• Three Prior Dismissals: At this point, there is a presumption that the debtor is using bankruptcy as a sword rather than a shield. The law prohibits such conduct. Therefore, even if a Georgia bankruptcy lawyer convinces the judge to extend the Stay, this extension is usually limited to about 90 days.

Multiple Filings and Debt Discharge in Georgia

Successive filings also affect the discharge order. The rules in this area are rather complex, as they hinge on the type and order of bankruptcy filings.

There is a two-year waiting period between successive Chapter 13 discharges. If the debtor received a Chapter 7 discharge, the waiting period grows to four years. However, in some cases, these waiting periods are irrelevant. Georgia bankruptcy lawyers often refer to this strategy as a Chapter 20 bankruptcy.

Assume Hector is behind on his student loan payments, so he files Chapter 7 hoping that the judge will discharge this unsecured debt. But he is unable to show an undue hardship per the Bankruptcy Code and the applicable law on this subject. So, the judge denies his motion to discharge his student loan debt. However, his other unsecured debts, like credit cards, are discharged.

To keep the student loan lender from garnishing his wages or taking other adverse action, Hector could immediately file a Chapter 13 and have up to five years to erase the delinquency. He would not be eligible for a discharge, but he does not need another discharge. He just needs to take advantage of the protected repayment period, which is fully available. This strategy is available in most jurisdictions.

Learn How You Can File Chapter 13 with a Free Consultation from a Bankruptcy Lawyer

If you’re wondering how often can you file Chapter 13 bankruptcy, you should know that you can file Chapter 13 more than once. For a free consultation with an experienced Georgia bankruptcy lawyer, contact Morgan & Morgan, Attorneys at Law, P.C. We routinely handle matters in Clarke County and nearby jurisdictions.