What is the effect of multiple bankruptcy filings?

by DeLadurantey Law Office, LLC on February 28, 2014

DebtA common question we get asked is “Can I file more than one bankruptcy?” The answer is yes, but there are certain rules for when and how it can be done. For more information, please read our blog titled “When can you file a second bankruptcy case?”

It is important to note, however, that there are consequences for filing more than one personal bankruptcy. A little-known penalty is that if you have had two or more bankruptcy filings dismissed within one year, the automatic stay does not go into effect in a subsequent case filed in that same year. In other words, none of your creditors are barred from continuing their collection efforts against you….at least until you meet certain conditions.

If you have prior bankruptcy filings and you are planning to file another case, it is important to seek legal counsel from an experienced bankruptcy lawyer. If you filed one previous bankruptcy case within the same year, the automatic stay will only go into effect for 30 days.  However, the stay can be extended if you can demonstrate to the court that your second filing was filed in good faith.  You must file a motion and have it decided by the bankruptcy court prior to the expiration of the 30 day period.  You, as the debtor, will have the burden of proof.  A common circumstance where a second filing is being made in good faith occurs if you have had a change in your financial circumstances (such as a significant increase/decrease in your income) or if your first case was filed pro se (without an attorney) and now you have retained a lawyer.

If you file a third bankruptcy case within one year of two previous filings, the automatic stay does not go into effect at all.  However, the debtor can request that the stay be invoked by bringing a motion similar to the one mentioned above, and proving that the third filing was made in good faith.  While not impossible to prove, it will likely be difficult to convince the court to invoke the stay on a third filing within one year.

Contact The “Milwaukee Bankruptcy Attorneys,” DeLadurantey Law Office. LLC.   DeLadurantey Law Office focuses on Chapter 7 and 13 bankruptcy, debtor’s rights, debt negotiations, debt relief, mortgage loan modifications, and foreclosure defense.  A “defender of the little guy, DeLadurantey Law Office serves the following location – Milwaukee, South Milwaukee, West Milwaukee, Waukesha City, Waukesha Town, Kenosha, Racine, and all other municipalities in Milwaukee County, Waukesha County, Kenosha County, and Racine County.  We can be contacted by phone: (414) 377-0518 and can be found on the Internet and on Facebook.

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