How Often Can You File Bankruptcy in Alabama?
If you find yourself overwhelmed by debt in Alabama, bankruptcy can offer a fresh start. Our exceptional bankruptcy attorney in Alabama guides individuals through the legal paths of Chapter 7 and Chapter 13 bankruptcy. Filing for bankruptcy can provide a clean slate, but how often can this financial reset be accessed?
How Often Can You File for Bankruptcy?
In Alabama, the frequency with which you can file for bankruptcy depends on the type of bankruptcy you previously filed and the type you plan to file next. Here are the rules:
- Chapter 7 to Chapter 7
Known as straight or liquidation bankruptcy, Chapter 7 allows for the discharge of most debts. If you have previously received a discharge under Chapter 7, the law mandates an eight-year waiting period from the date of your initial filing before you can file another Chapter 7 case. This gap ensures that the benefit of debt discharge is not exploited.
- Chapter 13 to Chapter 13
This type of bankruptcy involves a repayment plan over three to five years. If you want to file for Chapter 13 bankruptcy again, you can do so just two years after the date of your first Chapter 13 filing. This shorter interval reflects Chapter 13’s focus on debt repayment rather than outright discharge.
- Chapter 7 to Chapter 13
If you initially filed for Chapter 7 and are considering Chapter 13 for your subsequent filing—perhaps to manage secured debts or catch up on missed mortgage payments—you need to wait four years from your Chapter 7 filing date. This wait acknowledges the complete discharge you received under Chapter 7, allowing you some breathing room before committing to a repayment plan in Chapter 13.
- Chapter 13 to Chapter 7
Transitioning from a Chapter 13 repayment plan to a Chapter 7 liquidation involves a six-year waiting period, unless specific conditions are met. If you paid all unsecured creditors in full in your Chapter 13 plan, or paid at least 70% of the claims under a plan that was proposed in good faith and represented your best effort, you might be eligible to file under Chapter 7 sooner.
These intervals between filings are designed to balance the need for relief with the prevention of strategic bankruptcy filings, ensuring the system supports those who need it without allowing for manipulation. Understanding these rules can help you plan more effectively for if or when you might need to consider bankruptcy as a solution to severe financial challenges.
Important Considerations
Understanding the mandatory waiting periods between bankruptcy filings is crucial, but it’s equally important to recognize that each financial situation is distinct. The decision to file for bankruptcy should be made with great care, considering your specific financial circumstances and future goals.
Consulting with a knowledgeable bankruptcy attorney is essential, as they can provide personalized advice based on a detailed assessment of your financial situation. This guidance helps you choose the most beneficial form of bankruptcy and strategize for the most effective timing and outcomes.
If you have previously filed for bankruptcy, it’s vital to adhere to the required waiting period to ensure your new petition is accepted. However, your options for financial relief aren’t limited to waiting to file another bankruptcy.
An experienced bankruptcy lawyer in Selma, AL can explore alternative debt relief solutions that might be available to you, such as debt consolidation or negotiated settlements with creditors. By taking a comprehensive approach to your financial challenges, you can make a more informed decision about whether to proceed with filing for bankruptcy or explore other solutions.
Need Help with Bankruptcy in Selma, AL?
If you’re considering bankruptcy for the first time or need advice on managing your debts, Loris Bankruptcy Law Firm can provide the guidance you need. For more information or to schedule a consultation, click this page. Let us help you reset your financial path and regain control over your finances with confidence and clarity.