How Long Do You Have to Wait Between Filing Bankruptcy in Pennsylvania?

Most people who file for bankruptcy will only do so once in their lifetime. However, there are some situations where people may need to file for bankruptcy a second time. If you’re thinking of filing for bankruptcy again in Pennsylvania, what do you need to know? How is a second bankruptcy different than a first?

If your bankruptcy case ended via a debt discharge or a completed repayment plan and you fell back into debt soon afterward, you must likely wait several years before filing bankruptcy again. The waiting period between Chapter 7 cases is generally eight years, while the mandatory time between Chapter 13 cases is just two years. Having multiple bankruptcy cases or dismissals back-to-back could lead to issues with getting the automatic stay, which our lawyers can address by petitioning the court to extend it in Pennsylvania.

For a free assessment of your case from our Pennsylvania bankruptcy attorneys, call Young, Marr, Mallis & Associates today at (215) 701-6519.

How Many Times Can You File Chapter 7 Bankruptcy in Pennsylvania?

Even if you have filed for Chapter 7 bankruptcy in the recent past, you might be able to refile if you have once again found yourself in debt. That said, you might have to wait between cases, as filing for bankruptcy soon after a first discharge might cause issues with obtaining a second one right off the bat.

How long you must wait to file again depends on the chapter you initially filed and what happened in the previous case. For example, suppose you received a discharge in a Chapter 7 bankruptcy case, which is the typical result. In that case, you will likely need to wait eight years before filing Chapter 7 bankruptcy again. Your Chapter 7 discharge will remain on your credit report for ten years following the case. Despite only needing to wait eight years before Chapter 7 bankruptcy filings, it may benefit you to wait ten or more years so that the previous case leaves your credit history.

The mandatory eight-year waiting period between Chapter 7 bankruptcy cases primarily exists to deter anyone from routinely racking up credit card debt just to get it erased from a discharge. If the court identifies you as a serial filer, the judge assigned to your case might dismiss it.

How Many Times Can You File Chapter 13 Bankruptcy in Pennsylvania?

Because Chapter 13 bankruptcies are complex, debtors’ cases could be dismissed before they fully repay creditors, forcing them to refile. Other times, debtors who successfully complete their Chapter 13 repayment plans might fall back into debt, in which case they may have to wait before filing another case in Pennsylvania.

If Your Case Was Successful

After a successful Chapter 13 bankruptcy, debtors must wait two years to file a Chapter 13 bankruptcy again. The shorter waiting period between Chapter 13 cases primarily is because debtors filing Chapter 13 aren’t seeking a debt discharge but time and structure to repay secured lenders. Each Chapter 13 case will stay on your credit report for seven years after filing.

If Your Case Was Dismissed

Chapter 13 bankruptcies are difficult and could be dismissed before debtors complete their three to five years of monthly payments. A case could be dismissed for failing to file documents, missing trustee payments, or not proposing a feasible plan. When this happens, our attorneys can help debtors swiftly refile.

If you only have one previous case, we can file another Chapter 13 bankruptcy petition immediately. We will also file a “motion to extend the automatic stay.” Otherwise, the automatic stay on creditors that goes into effect when you file will only last 30 days if it is your second Chapter 13 within a calendar year.

In the motion, our lawyers must prove your new case will likely succeed despite the previous dismissal. For example, income statements showing you are making more money or evidence showing your expenses have significantly decreased could help on this front.

How Long Do I Have to Wait Between Chapter 7 and 13 Bankruptcy Filings in Pennsylvania?

Suppose your first bankruptcy was a Chapter 7, but your current financial situation suits Chapter 13, or vice versa. This could affect the waiting period for a discharge and between case filings in Pennsylvania.

For example, say you obtained a discharge under Chapter 7 but are now trying to file Chapter 13. In that case, you must ensure a four-year waiting period between the original Chapter 7 filing and the new Chapter 13 case.

Debtors switching from Chapter 13 to Chapter 7 cases must also wait. If you previously filed Chapter 13, you must wait six years before filing Chapter 7 and getting a debt discharge. That said, the six-year waiting period may be waived if you successfully paid all of your unsecured creditors during your first bankruptcy, which are creditors not “secured” by collateral, such as a mortgage lender. You could also be exempt if you successfully paid off a minimum of 70% of debt during your first bankruptcy and demonstrated good faith. In the context of bankruptcy, “good faith” essentially means that you were honest (e.g., didn’t commit fraud, hide any of your assets, and made sure to put your disposable income toward paying off your debts).

Timing Your Bankruptcy Filing in Pennsylvania

The timing of your bankruptcy petition could impact your ability to file Chapter 7 or 13 and make your case more expensive. Our lawyers will often suggest timing your filing to best benefit your needs after reviewing your debt, income, and expenses.

Taking the Means Test

The bankruptcy chapter you file will be dictated by the means test, which looks at your household income for the previous six months before you file for bankruptcy.

Chapter 7 is designed for people with limited income and assets. Therefore, your household income must be below the “median income” for your area and household size. When completing the means test, our attorneys will include all your household income, including your salary, your spouse’s income, unemployment benefits, tax refunds, and any contributions from friends or family members.

This same income will be used to calculate your monthly disposable income in a Chapter 13 bankruptcy. Most people file for Chapter 13 for a specific reason, such as mortgage foreclosure, tax debt, or other secured debts that must be urgently repaid. Often, Chapter 13 debtor can still discharge their unsecured debts unless they have disposable monthly income. Debtors’ disposable monthly income, as determined by the means test, must be paid to their unsecured creditors. This amount is in addition to any mortgage arrears or tax debt they are paying. For example, a debtor might have to pay $450 monthly to repay their mortgage company and keep their house. In addition to their mortgage arrears, the debtor has $45,000 of unsecured credit card debt. If their disposable monthly income is $250, they must pay an additional $250 a month towards their unsecured debt.

With the means test in mind, if you receive an end-of-the-year bonus, waiting to file bankruptcy may benefit you, so the bonus is not included in your six months of household income. Some debtors have control over their overtime. Refraining from working overtime for a few months could qualify you for Chapter 7 or make your Chapter 13 case more affordable. If you recently lost your job, it may benefit you to wait a few months so that your old income will not be part of the calculations during the means test.

Facing Creditor Lawsuits

These considerations do not exist in a vacuum. Unfortunately, there are times when you cannot control when you need to file. For instance, if your house has a listed sheriff’s sale date, delaying your filing might not be possible. Also, you might want to file before a creditor obtains a judgment or repossesses your vehicle. Being honest and open with our Bethlehem bankruptcy attorneys is important so we can assist you and quickly prepare strong bankruptcy complaints, especially if you are facing creditor lawsuits or other action from lenders.

What Could Happen if You File Bankruptcy Too Many Times in Pennsylvania?

If you have two previous bankruptcies in the same calendar year, the automatic stay does not go into effect. In this case, a debtor must file a “motion to impose the automatic stay.” There is a greater burden of proof on the debtor to show they are in an improved financial position.

Multiple filings are a common problem when debtors try to file and navigate cases independently. If debtors try to file for bankruptcy and only seek legal assistance after two or more dismissals, they could find themselves in a position where bankruptcy is not helpful or viable. Bankruptcy is a complicated legal process. Mistakes have far-reaching consequences. If you need to file for bankruptcy because you are overwhelmed with debt or your home is in foreclosure, talk with one of our sympathetic Allentown bankruptcy attorneys before taking action on your own.

If your first bankruptcy was dismissed, you may file again without a time limit unless the court states otherwise. However, if you have a previous case dismissal from within the past year, the automatic stay will only last for 30 days unless you can demonstrate good faith in your second bankruptcy.

How to Prevent Bankruptcy Dismissals and Repeat Filings in Pennsylvania

Bankruptcy requires all petitioners to meet specific requirements and comply with orders as instructed by the court and the Bankruptcy Code. Failure to meet these specifications can result in a case dismissal, which would force you to refile.

Provide Accurate Statements

One of the most essential aspects of your bankruptcy application is the financial information you provide. Part of the bankruptcy process requires all petitioners to provide in-depth details related to their finances, including their debts and creditors. While some petitioners might feel tempted to add or withhold information to qualify for a discharge, this is not recommended, as they’d be providing false statements to federal entities for a favorable outcome. Providing incorrect information during a federal process can lead to severe penalties, which our attorneys can avoid by being thorough, reliable, and honest when filing and navigating your bankruptcy case.

Do Not Conceal Assets

Debtors who intentionally or unintentionally try to conceal or lose assets to avoid losing them during the liquidation process may see their cases dismissed. For instance, Chapter 7 bankruptcy requires a court-appointed trustee to sell all nonexempt property, meaning your guitar, stamp collection, coin collection, and other valuable items could be sold. Trying to conceal such assets would be detrimental, as the money the trustee obtains during the liquidation process is destined to pay all your creditors. Without assets to liquidate to repay secured assets, you might not be able to successfully complete your Chapter 7 case.

Do Not Disregard Court Orders

As part of your bankruptcy process, you will need to follow the rules issued by the court. Whether for providing new information or appearing before the judge, you must comply with any orders instructed by the bankruptcy court. Non-compliance with a court order can hurt your case. Furthermore, depending on your circumstances, it may be dismissed altogether. To avoid unnecessary issues with your case, our lawyers will ensure you follow every instruction and meet all the requirements set forth by the bankruptcy court.

Call Our Bankruptcy Lawyers to Discuss Your Case in Pennsylvania

For a free case review from our Pennsylvania bankruptcy attorneys, call Young, Marr, Mallis & Associates today at (215) 701-6519.