Bankruptcy is a legal status that a person or business entity may seek if they are unable to repay their creditors. The aim is to obtain relief from debt. It can only be imposed by court order, with cases always filed in United States Bankruptcy Court. The law encompasses six types of bankruptcy. The most common is Chapter 7, which allows basic liquidation of assets for individuals and businesses. Chapter 13 is also common, and it provides rehabilitation through a payment plan for individuals with a regular income.

If you successfully file for bankruptcy, you will receive what is called a “discharge.” This frees the debtor from personal liability for debt and bars creditors from collection actions. You may retain your home and car and reaffirm the debt and continue to make payments. 

     There are, however, limitations regarding how quickly you can file a second time. Timelines depend on the type of bankruptcy previously filed, when the discharge was received, and which type you want to file now.

If you previously filed Chapter 7 bankruptcy, for instance, and you want to do so again, you can’t obtain a second discharge in a Chapter 7 case until at least eight years since filing the first case. For successive Chapter 13 cases, you have to wait at least two years from the date of the first filing. If you were granted Chapter 13 bankruptcy and you now want to file Chapter 7, you have to wait six years from the date of the filing of the Chapter 13. If you were granted Chapter 7 and now want to file Chapter 13, four years are needed in between.  You can file a Chapter 13 shortly after receiving a discharge in a Chapter 7.  You will receive the protection of the Bankruptcy Code but you will not be eligible to receive a discharge. 

These are only basic timelines, and they can be impacted by many other factors—for instance, if the courts dismissed a previous filing an injunction against filing another case with a certain amount of time. Additionally, the scenarios described don’t encompass the other types of bankruptcy you may be eligible for. It’s important to acknowledge these rules and not attempt to circumvent them. Filing takes time, effort, and money—you don’t want to waste these assets, all to no avail. 

The best way to ensure a successful filing is with the help of an attorney. The federal legislation is complex, and it is made further complicated by diverse state laws. For a local firm specializing in bankruptcy law in Mobile, AL, look to Frances H. Hollinger Attorney at Law. These professionals work closely with their clients to help them sort through pressing financial matters, including debt relief. For more information on their team, visit them online, and call (251) 943-9030 to schedule an initial consultation today.