- July 30, 2023
- Thomas Adam
If you have previously declared bankruptcy and are now in a position where you may need to file again, the good news is that there is no limit on how many times you can file for bankruptcy. However, there are a number of rules and restrictions that apply, warranting that you work with an experienced bankruptcy attorney.
Chapter 7 and Chapter 13 Bankruptcy Explained
In a nutshell, when filed correctly, bankruptcy is permanent and wipes out debts so that creditors cannot collect on them. The two most common types of bankruptcy filed for, because they are the most applicable to individual consumers, are Chapters 7 and 13 bankruptcy. Both require that you complete a mandatory credit counseling course first.
Chapter 7 is often referred to as liquidation bankruptcy because it liquidates and distributes assets to creditors. It also allows you to clear your debt and takes an average of four to six months. Chapter 7 also involves a court trustee reviewing your assets to decide what is worth selling or liquidating to pay off creditors and involves a meeting of creditors, where you are asked questions about your debts and finances. You will also have to pass a means test based on Florida state median income first before you can qualify.
Chapter 13 allows you to keep your assets but still requires debt repayment, usually over a three to five-year payment plan. Chapter 13 reorganizes your finances in the form of a repayment plan that must be completed within three to five years. In contrast to Chapter 7, there is no maximum income restriction to file.
Other Types of Bankruptcy
Other types of bankruptcy include the following:
- Chapter 12: Allows family farmers to continue to operate while filing so that they can reorganize and pay part or all of their debts
Chapter 11 (individual): Often referred to as “reorganization” bankruptcy and debtor remains in possession, like a trustee
- Chapter 11 (business): Allows business to continue to operate while the court and creditors approve of a repayment plan
Filing Multiple Times for Bankruptcy
You can file multiple times within the same chapter of bankruptcy, but you will have to wait between two years (Chapter 13) and eight years (Chapter 7) to do so, depending upon which chapter of bankruptcy you are filing for.
If you wish to file for Chapter 7 bankruptcy after Chapter 13, you must typically wait six years. However, you can also get this waived if you show that you paid off at least 70 percent of your unsecured debts from Chapter 13 and can demonstrate that you made good faith efforts to repay your plan.
If you wish to file for Chapter 13 bankruptcy after Chapter 7, you will typically have to wait four years from the date of your Chapter 7 filing. However, there are provisions that allow you to file immediately and set up a payment plan instead.
Debts and Obligations That Cannot Be Discharged
It is critical to note that not all debts can be discharged. For example, even after filing, you are still responsible for the following obligations:
- Child support
- Court fines
- Criminal restitution
- Personal injury expenses for such actions as driving under the influence
In addition, a separate process is typically involved in discharging student loan debt, and a judge can decide to discharge some or all of it or simply apply different repayment rules for the student loans.
Florida’s Adam Law Group: Your Partner in Bankruptcy Relief
Those debts that are wiped out are those that accrued prior to filing for bankruptcy. Therefore, it is critical that you work with your attorney to be as thorough as possible in listing both your debts and property.
At the Adam Law Group, we are dedicated to ensuring that your needs are met, regardless of where you are in life. We understand just how difficult and overwhelming it can be to have this debt hanging over you, and we are committed to making this expedient and affordable for our clients. Contact us today for a free consultation to find out more.