Filing for bankruptcy is a process that can help a person discard debt or make a plan to repay debt. If you’re in a position where you think bankruptcy is the right option for you, you’ll need to have a comprehensive understanding of the process. A lawyer from Belsky & Horowitz, LLC can help.
You may be wondering about the time limits associated with filing for bankruptcy. While there are no limits associated with when you are first allowed to file, there are restrictions in the event you need to file more than once. In order to understand those time limits, let’s start by taking a look at the bankruptcy code.
Understanding the Bankruptcy Code
All bankruptcy cases are handled in federal courts under the rules outlined in the U.S. Bankruptcy Code. If you’re filing as an individual, you’ll likely be filing either Chapter 7 or Chapter 13. Chapter 7 liquidates debt, while Chapter 13 offers the opportunity to reorganize debt and establish a repayment plan.
While you have the option of filing for bankruptcy without a legal representative, it’s recommended that you work with a lawyer. Filing for bankruptcy has long-term financial and legal consequences, so it’s important to understand what those potential consequence are and how they could impact your future.
Knowing How to Time Your Bankruptcy Filing
While sometimes it makes sense to file bankruptcy right away, there are other instances where it’s beneficial to wait. Determining when to file your bankruptcy petition depends on a number of factors. You may need to file immediately if, for example, you’re facing imminent foreclosure or car repossession. However, if you have the opportunity to modify your mortgage, you may want to do so before you file for bankruptcy. This is because many lenders will refuse to enter into or continue negotiations over your mortgage once you’ve liquidated or rearranged your debts.
If you have property you don’t want to lose, your lawyer can advise on whether you’d benefit from waiting to file. Example of property includes tax refunds and nonexempt assets—which include property other than your house, car, household goods, clothing, and other necessities.
If you’re anticipating having new debts soon, you’ll also want to consider holding off on filing. This is because, as a general rule, Chapter 7 only erases debts you have as of your filing date. In the event additional debt comes along later, you’ll to deal with those on your own.
Filing for Bankruptcy More Than Once
While there are no time limits associated with when you can file bankruptcy for the first time, there are limitations in place if you are looking into filing more than once. The limits are different depending on the chapter you choose to file.
If you need to file successive Chapter 7 cases, you’ll have to wait eight years before filing the second case. With successive Chapter 13 cases, there only needs to be a time lapse of two years. If you were originally granted your first discharge under Chapter 13 and now you’re looking to file Chapter 7, you’ll need to wait six years. If, however, you paid unsecured creditors in full in the Chapter 13 case or you paid at least 70% of the claims, the time limit could be reduced. If you granted your first discharge under Chapter 7, you have to wait four years before filing for Chapter 13.
It’s important to note that it might be beneficial to consider filing a second time, even without a discharge. If you simply need time to pay off a debt, filing Chapter 13 could give you that option and you’d be able to set up a repayment schedule that works for you.
Understanding the time limitations associated with filing for bankruptcy multiple times can be confusing. That’s why it’s best to work with a bankruptcy lawyer who has a comprehensive understanding of how the system works.
Contact Belsky & Horowitz, LLC
If you’re reaching a point with your finances where you’re no longer able to manage your debt and you feel as though you’ve exhausted all other options, bankruptcy may be able to help you build a strong financial future.
For more information on the bankruptcy process or to secure legal representation, contact a bankruptcy attorney from Belsky & Horowitz, LLC today. We represent clients in and around the Baltimore area.
When you reach out to us, we’ll review your situation and help you determine if bankruptcy is the best option for you. If it is, we can guide you through the process and ensure you aren’t taken advantage of by creditors. Schedule a consultation with our firm today.