Repairing Your Financial Situation

Posted on: 30 July 2020

If you've been viewing a bankruptcy filing with an increasing sense of inevitability, you may need to consider a few issues before you file. The below issues should not prevent you from filing but you may need to do a bit more work before you do file if they apply to you.

Time Elapsed Between Bankruptcies

The U.S. Bankruptcy Courts allow filers to file as many times as they need to. The only issue is the amount of time that needs to pass between the filings. If you have a lot of unsecured debt, such as credit cards, personal loans, and medical debts, you might want to go with chapter 7 rather than chapter 13 since you can wipe those debts out with a filing. The law says you have to wait at least 8 years from your most-recent chapter 7 filing before you file again. Chapter 13 allows filers to file after 6 years. In some cases, you may have tried for bankruptcy relief but ended up having your case dismissed. Dismissals can occur for various reasons such as not fulfilling educational requirements or not appearing at the creditor's meeting. If your case was dismissed without prejudice, you can re-file in 180 days. If your case was dismissed with prejudice, that's another matter. Cases like that may never be re-filed (see more about that below).

Fraudulent Activity

Even filers that did not set out to commit fraud can get caught up in actions that the court will view as illegal. When allegations of fraud occur, cases can be dismissed and a separate case is opened. Pending the results of the case, filers may or may not be allowed to file again. Below are listed some common issues that get some filers in trouble. Be sure to talk with your bankruptcy lawyer to find out more about these issues before you file. If you can resolve them prior to filing, your case will proceed far more smoothly.

• Being less than honest when completing your bankruptcy paperwork. Filers need to list accurate numbers and information about income, assets, and more.
• Hiding, selling, giving away, or transferring assets in the months prior to filing. Be sure to tell your lawyer about all instances of assets leaving your possession and provide an accurate assessment of the value of those assets.
• Running up the balance on credit cards in the months prior to filing for frivolous purchases.

Income Issues

All filers must have an income at or below the state's median income level when they file. Only certain time periods and income are counted, however. If your income is too high, your lawyer might advise you to wait a month or so if you expect your income to be low enough to file. Also, certain debt obligations may be deducted from your income so that you can still file for the debt relief you need.

Discuss any of the above with your bankruptcy lawyer – the sooner the better. Contacting a professional that understands chapter 7 bankruptcy laws can help you make the right decisions.