Can I File Chapter 7 the Second Time Legally and Safely?
No one wants multiple Chapter 7 cases, or to file any chapter a second time, because of the burdens and impacts today on so many aspects of modern life. In a perfect world, we all would prosper splendidly and enjoy a rich life. Then realty sets in. For some people, no other option exists but a second spin through the federal court system.
Officially, the U.S. Bankruptcy Code refers to repeat filers as “multiple” filings. The applicable statutes specifically regulate four different situations.
- The Eight Year Limitation – According to 11 U.S.C. Section 727(a)(8), no one may re-file a Chapter 7 case after receiving a prior Chapter 7 discharge at any time during the last eight years. Measure the period from the date the court signed the discharge order until the new filing date.
- The Six Year Limitation – Under 11 U.S.C. Section 727(a)(9), debtors may not file a case under Chapter 7 if receiving a Chapter 13 discharge during the last six years, unless the Chapter 13 case paid at least 70% of all unsecured claims in good faith. Calculate the period from the day a judge signed the discharge order until re-filing a Chapter 7 case.
- The 180 Day Limitation – The provision of 11 U.S.C. Section 109(g) bar re-filing under Chapter 7 for all people who had a prior case dismissed “with prejudice” during the last 180 days. The term prejudice refers to situations in which the court found substantial abuse, or intentional disregard for the law.
- No Limitation – You may file Chapter 7 a second time so long as the three requirements above do not apply, and you qualify under the general provisions for this chapter.
The best practice for anyone with a pending case is to freely communicate with trustee and the court yourself, or preferably through your attorney. If you cannot comply with all rules, let authorities know early. You may avoid the dreaded badge of abuse by simply explaining your situation before the court takes action. Reputations tend to follow debtors throughout the entire process.
Everyone dreads filing a second time. Multiple filings follow you through each job interview, insurance quote, and bank application. Nevertheless, almost anyone can file a second chapter 7 case legally with confidence when complying with a few requirements.
When you ask the courts if you can file for chapter 7 a second time the answer is a resounding yes if you comply with all rules.
Understanding Qualification Standards and Rules
People, businesses, partnership and others may file Chapter 7. Debtors may begin a new case if residing, owning property, or doing business in the United States. Every individual filing today must also receive a certificate from an approved credit counseling service. The certificate must bear a completion date within 180 of filing.
Perhaps the most strict and complex qualification relates to the notorious means test. Basically, this test disqualifies all people considered high earners. The definition of a high income earner is a person who earners more disposable income than the national mean income.
The test further provides numerous formulas and exceptions, and additional exceptions to exceptions, used to determine qualification. The test calculates monthly disposable income, by subtracting approved deductions from average income received. The rules are complicated and the calculation difficult. The official form is similar to a multiple page IRS form with limited instructions.
If you are curious whether you pass the means test, you have two options. You may retain an attorney to perform the calculations for you. You may pay up to $500 if choosing this option, each time you perform the calculation. Better, you can take the means test at home and perform the calculation yourself. If you choose the second private option, the calculation is quite easy with our worksheets. We provided highly optimized and simplified forms, worksheets and instructions to find your best possible test result. Our forms are designed to serve only debtors, and optimize results legally, safely, and profitably. You can take the test as many times as you wish, as often as you wish, until you get the result you want.
The First Key is Found in Your Deductions
Many approved expenses allowed in the test have zero leeway. The test rules only allow standard living expenses based on national averages in many categories. But many other deductions rely on actual living expenses. The instructions provided with the official test form provide little meaning guidance for debtors to maximize test results.
We however provide extensive instructions, tips, recommendations, and even a few tricks to legally maximize all deductions. Our instructions alone save many people from struggling needlessly for five years in a Chapter 13 plan when they actually qualify for Chapter 7. You must fully understand your options to obtain your best results.
The Second Key is Your Income Measurement
How do you calculate your disposable monthly income? It is a sure bet that it is not the same as the method adopted by the U.S. Bankruptcy Code. The calculation is odd. It changes easily in response to unexpected income, deductions, bonuses, commissions, and business cycles. Timing is critical. Small changes and timing can have a breath-taking effect on your future. The test should not scare you. If taken properly, with highly targeted expert instructions, the means test can help you far more than a dozen interviews with average lawyers.