Filing for bankruptcy is available to honest debtors to allow them respite from their creditors. Even those debtors that have previously filed for bankruptcy relief are allowed to file again for bankruptcy. For those debtors with previous bankruptcy filings, they may not be entitled to a discharge or other protections allowed to bankruptcy debtors depending on the status of their previous cases and when their previous bankruptcies were filed.
According to 11 U.S.C. § 362(c)(4)(A)(i), which provides that-by operation of law- the automatic stay shall not go into effect upon the filing of a bankruptcy case, if a debtor had two or more bankruptcy cases that were pending but dismissed in the previous year. The stay prevents a creditor from collecting, pursuing, foreclosing or repossessing without first getting permission from the court. This becomes important to both creditors and the debtors if there is collateral involved, and the creditor is again prevented from obtaining the collateral (usually a home or vehicle) because of the new bankruptcy filing.
If a debtor continues to file and re-file bankruptcies, allowing the previous bankruptcy to dismiss, the creditor is unable to pursue the debt and in the case of vehicles and homes there may be an issue with depreciation or adequate protection. Meanwhile, the debtor enjoys the protection of the bankruptcy to the detriment of the creditor. The bankruptcy code prevents serial bankruptcy filers from enjoying the same protections as debtors without previously dismissed cases. The law is intended to prevent bankruptcy filers from abusing the bankruptcy system, to prevent the debtors from continuously filing and re-filing dismissed case for the purpose of thwarting their creditors.
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Bankruptcy relief is available to filers with previous bankruptcy filings, even if the previous case was dismissed. And the debtor will likely be entitled to a discharge of their debts, however there are laws in place to protect creditors from serial bankruptcy filers seeking only to impede their creditors. Contact the attorneys at LifeBackLaw and see us at www.LifeBackLaw.com and let us help you get your life back.
