How Often Can You File Bankruptcy in NJ?
Learn how often you can file for bankruptcy in NJ, the restrictions and waiting periods involved, and how the Law Offices of Wenarsky and Goldstein, LLC can help you navigate the process.
Understanding the Statutory Time Frames and Limitations for Subsequent Bankruptcy Filings
Bankruptcy allows individuals or businesses to get relief from overwhelming debt under the supervision of dedicated bankruptcy courts.
Though a person can file for bankruptcy multiple times during their lifetime, there are statutory limits that could affect how often one can file depending on the previous bankruptcy chapter filed, the chapter under which they currently seek relief, and whether a bankruptcy discharge (of debts) was obtained under the previous bankruptcy proceedings.
If you’re considering bankruptcy for a second or subsequent time, understanding the rules and filing limitations is essential to ensure you get the maximum benefits and debt relief possible.
At the Law Offices of Wenarsky and Goldstein, LLC, we understand the intricacies of the bankruptcy process and its legal requirements. Our skilled New Jersey bankruptcy lawyer can help you understand the statutory waiting periods and conditions for each chapter, guiding you through the process smoothly and effectively.
Below, we discuss the waiting period for subsequent bankruptcy filings and the impact of a previous bankruptcy discharge on the possibility of future debt relief to guide you before you take any steps. We look forward to answering any questions you might have afterward.
Common Types of Bankruptcy and Their Filing Time Limits
Most bankruptcy petitions are filed under Chapters 7 and 13 of the bankruptcy code. They each have unique filing limitations, which we shall now explore:
Chapter 7 Bankruptcy
Chapter 7 bankruptcy involves liquidating or selling a debtor’s assets by an assigned bankruptcy trustee to pay off debts. It is meant for individuals and businesses in genuine financial distress. As such, the Bankruptcy Code requires potential Chapter 7 debtors to take a means test that evaluates their income against designated thresholds. Only those who pass the test will be allowed to proceed.
This type of bankruptcy can provide debtors with significant or total debt relief because it eliminates most unsecured debts (debts owed without collateral, such as credit card debt). However, a Chapter 7 debtor risks losing significant chunks of their assets (subject to the applicable bankruptcy exemptions).
Generally, a debtor can file a Chapter 7 bankruptcy petition as often as possible, regardless of the amount they owe. But filing is prohibited if such a debtor had filed a previous bankruptcy petition of any kind that had been dismissed in the last 180 days due to
- The debtor’s wilful failure to appear before the bankruptcy court
- Failure to comply with a bankruptcy court order
- Voluntary dismissal of the bankruptcy case by the debtor after the creditors in the previous case sought relief from the bankruptcy court to recover property (collateral) upon which they hold liens.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows debtors who have a regular income to pay off their debts following the terms of a manageable court-approved repayment plan based on their disposable income. This type of bankruptcy is notable for its ability to prevent foreclosure and repossession and help debtors catch up with past-due payments without losing their assets.
Like Chapter 7 bankruptcy, a person can file Chapter 13 bankruptcy at any time after a previous filing unless the previous petition was dismissed within 180 days for the reasons stated in the previous section.
Other than in these circumstances, it is possible to file a Chapter 7 or Chapter 13 petition shortly after a previous bankruptcy filing. However, whether or not you can obtain a bankruptcy discharge in a subsequent filing will depend on how much time has passed and other factors, as discussed in the next section.
Impact of a Prior Bankruptcy Petition on Future Bankruptcy Discharge
A bankruptcy discharge is a legal release granted to a debtor, relieving them of their obligation to pay certain debts. This discharge marks the end of the bankruptcy process for most debtors and means they are no longer obligated to repay those debts. Creditors cannot take any collection actions on these discharged debts, such as calling, sending letters, or suing the debtor.
Obtaining a bankruptcy discharge is one of the key reasons people file bankruptcy. However, past bankruptcies can significantly influence one’s ability to secure a bankruptcy discharge, depending on the types of bankruptcy involved ( past and present) and how much time has passed.
For example, if your previous bankruptcy was filed under Chapter 7 and you obtained a bankruptcy discharge, you must observe a mandatory waiting period of 8 years before filing a new Chapter 7 bankruptcy to obtain a discharge.
But if you seek a Chapter 7 bankruptcy after a previous Chapter 13, you must wait six years after the previous bankruptcy to file a new petition and obtain a discharge unless:
- All your claims were paid in the previous bankruptcy or
- At least 70% of your claims were paid; the Chapter 13 plan was proposed in good faith and was your best effort as a debtor.
Understanding the rules and calculating the mandatory waiting period could be difficult sometimes. Hence, It’s always wise to approach these complex matters with the guidance of an experienced bankruptcy attorney.
While individuals may represent themselves in bankruptcy court, professional representation ensures a better understanding of the legal landscape and compliance with the necessary statutory requirements, which can, in turn, enhance the possibility of achieving the desired outcome.
How the Law Offices of Wenarsky and Goldstein, LLC Can Help
At the Law Offices of Wenarsky and Goldstein, LLC, we offer a comprehensive range of bankruptcy services.
With our extensive experience in personal and business bankruptcy, we can provide the legal counsel and representation you need to tackle your financial challenges effectively.
We know that each bankruptcy case is unique. You can trust us to help you formulate tailored bankruptcy strategies and steer you toward a much-needed fresh start.
Our commitment also doesn’t end in court. In the critical period after your bankruptcy, we can help you strive to regain control of your finances by offering advice on managing debts and rebuilding your financial health.
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Understanding the statutory waiting periods for filing bankruptcy after a previous bankruptcy is crucial as it affects eligibility and the type of relief available. These waiting periods determine when a debtor can receive another discharge and are designed to prevent abuse of the bankruptcy system.
Filing a new petition before the waiting period expires can result in denial of a new bankruptcy discharge, leaving debtors without the intended protections and benefits. Legal guidance is often necessary to navigate these rules and to plan effectively for financial recovery.
Our dedicated team at the Law Offices of Wenarsky and Goldstein, LLC can help you navigate the legal process, whether you’re dealing with Chapter 7 or Chapter 13 bankruptcy. So, do not hesitate. Contact our New Jersey bankruptcy attorney, and let us help you take the next steps in your journey toward debt relief.
Call the Law Office of Wenarsky & Goldstein
At the Law Offices of Wenarsky & Goldstein, LLC, our New York and New Jersey attorneys are experienced and knowledgeable in bankruptcy, estate planning and probate, guardianship, special needs planning, and real estate law. To learn more about how we can assist you with your legal needs, call us today at 973-453-2838.
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