Are You Eligible for a Chapter 7 Bankruptcy if You Have Previously Filed for Chapter 13 in South Carolina?

Do You Need to File for a Second Bankruptcy?

Whenever someone in this state files for bankruptcy, that person must be advised by a South Carolina bankruptcy lawyer. There’s no limit to the number of bankruptcies you may file, but there are rules about how soon you may file for a second or subsequent bankruptcy.

The designated waiting periods between bankruptcy filings depend on the type of bankruptcy you file and whether your previous bankruptcy was successful or dismissed by the bankruptcy court. If your last bankruptcy succeeded, the waiting periods will apply.

You should try to rebuild your finances and credit after a bankruptcy, but a second or subsequent bankruptcy remains a last-resort solution when debts become unmanageable. Before you act, review your options, rights, and obligations with a South Carolina bankruptcy attorney.

What Are the Different Types of Personal Bankruptcies?

If you understand the consequences of filing for a second bankruptcy, and if you’re willing to face those consequences, you will need to decide, with your attorney’s help, if a Chapter 13 or a Chapter 7 bankruptcy is best for your particular personal and financial situation.

The United States Code – the complete federal laws of the United States – includes 54 “titles.” Title 11 is the U.S. Bankruptcy Code, the federal bankruptcy laws of the United States. Chapters 13 and 7 are the chapters of Title 11 that address personal bankruptcies.

What is a Chapter 7 Bankruptcy?

How are Chapter 13 and Chapter 7 bankruptcies different, and what do these two bankruptcy options provide? A bankruptcy under Chapter 7 offers:

1. Convenience: A Chapter 7 bankruptcy may be completed in approximately ninety days, and filing for a Chapter 7 bankruptcy is usually less expensive than filing for a Chapter 13 bankruptcy.
2. Relief from creditors: An automatic stay takes effect immediately upon filing a Chapter 7 bankruptcy. That automatic stay prevents your creditors from suing you or even contacting you.
3. A fresh start: Your unsecured debts are wiped out (discharged) with a successful Chapter 7 bankruptcy.

What is a Chapter 13 Bankruptcy?

To file a Chapter 7 bankruptcy you must pass a means test. That test disqualifies debtors who are able to pay back a portion of their debts. However, those who are disqualified from Chapter 7 by the means test may file for a Chapter 13 bankruptcy. Chapter 13 bankruptcies:

1. Protect part of your assets: Filing for a Chapter 13 bankruptcy will let you retain some of the assets that would have to be surrendered if you filed a Chapter 7 bankruptcy.
2. Stop foreclosures: Filing for a Chapter 13 bankruptcy allows a homeowner to catch up on past-due mortgage payments and to begin making current payments.
3. Restructure child support and divorce debts: Chapter 13 bankruptcies require you to pay child support and other divorce-related debts over a three-to-five-year period.
4. Chapter 13 bankruptcies also restructure payment amounts and schedules for your home and vehicle.

After scrutinizing your financial status and speaking with you personally, a South Carolina bankruptcy attorney will recommend a Chapter 13 bankruptcy, a Chapter 7 bankruptcy, or an alternative that allows you to avoid bankruptcy altogether.

What Waiting Periods Are Required Between Bankruptcies?

If you need to file a second time for bankruptcy, here is how long you will have to wait before you become eligible. The waiting periods listed here are based on the bankruptcy filing dates, not the discharge dates:

1. A second Chapter 7 bankruptcy may be filed eight years after you filed for a first Chapter 7 bankruptcy, and a second Chapter 13 bankruptcy may be filed two years after you filed for a first Chapter 13 bankruptcy.
2. A Chapter 13 bankruptcy may be filed four years after you filed a Chapter 7 bankruptcy, and a Chapter 7 bankruptcy may be filed six years after you filed a Chapter 13 bankruptcy.

Are There Any Exceptions to the Waiting Periods?

People who previously filed for a Chapter 13 bankruptcy and fully paid their unsecured creditors (that is, those who paid everything except what was still owed on vehicles, houses, and other collateralized property) won’t have to wait as long before filing for a Chapter 7 bankruptcy.

The same exception applies to Chapter 13 filers who paid at least 70 percent of their unsecured claims, proposed a payment plan in good faith, and made their best efforts to pay creditors. If you qualify for an exception, a South Carolina bankruptcy lawyer will explain the details to you.

How Long Does a Bankruptcy Remain on Your Credit Report?

A Chapter 13 bankruptcy is erased from your credit report only seven years after the filing date because Chapter 13 bankruptcies require at least a partial repayment of your debts.

However, it takes ten years for a Chapter 7 bankruptcy to disappear from your credit report. That’s because, with a Chapter 7 bankruptcy, none of your debt has actually been repaid. However, paying your bills on time can quickly help you to re-establish a good credit rating.

If you’re struggling with debt, it doesn’t necessarily mean that bankruptcy is your only option. Your personal finances will determine whether bankruptcy is your best alternative, and an experienced bankruptcy attorney will help you review all of your options and alternatives.

Struggling With Debts? Contact The Howze Law Firm at Once

Don’t try filing for bankruptcy on your own. Bankruptcy isn’t necessarily your best option, and any mistakes could make your financial situation worse. Instead, if you can’t pay your debts, promptly schedule a consultation with The Howze Law Firm.

Our award-winning law firm helps families and individuals who face foreclosures, wage garnishments, repossessions, and debt lawsuits. If the bankruptcy option is right for you, The Howze Law Firm will guide you through each step of the bankruptcy process.

Before you decide on bankruptcy, schedule a legal consultation by calling 803-266-1812, and together, we’ll find the best way to resolve your debt problem. The Howze Law Firm represents and advises clients in Rock Hill, Fort Mill, York, Clover, Lancaster, Lake Wylie, Winnsboro, Great Falls, Chester, Catawba, Gaffney, Heath Springs, Union, and throughout South Carolina.