Can You File for Bankruptcy Multiple Times in Detroit?

Multiple Bankruptcies in Detroit

Deciding to file for bankruptcy is not easy. It is a big choice that could affect your finances for a long time. If you are thinking about it, you should learn how filing more than once might impact you. Bankruptcy is not always the right answer for every situation.

There are a few key points to keep in mind before you take this step, as follows.

What Bankruptcy Can Do

Bankruptcy can help in many ways, but it is good to know what it can and cannot fix. For example, it can cancel some of your debt or make it easier to pay by setting up a plan.

Filing for bankruptcy can also stop foreclosure for a while, and this provides time to catch up on missed payments. It can also protect things like your car or other property from being taken. If your lights or water were turned off because you could not pay the bills, bankruptcy might help you get them back on by paying a small fee.

One of the best parts of filing for bankruptcy is that debt collectors have to stop bothering you. Once you file, they are not allowed to call or threaten action. Collectors also have to talk to your lawyer if they have questions about your debt instead of contacting you. If your wages are being taken out of your paycheck to pay off debt, bankruptcy can stop garnishment.

What Bankruptcy Can Do

Things to Know Before Filing for Bankruptcy

There are some rules to keep in mind before starting the bankruptcy process so you are not caught off guard later. For example, bankruptcy cannot completely erase debts you owe to secured creditors. These are debts tied to things like your house or car, where the creditor can take back the item if you do not pay.

Knowing this ahead of time can help you avoid surprises during the process. If you take on any new debts after filing for bankruptcy, those debts cannot be added to your payment plan. This means they will not be erased or discharged through the bankruptcy process. You will still be responsible for paying them back on your own.

Understanding Multiple Bankruptcy Filings

When you file for bankruptcy, the court sets up two legal cases: one for you and one for the people or businesses you owe money to. If you file again within eight years of your first case, the second filing will be combined with the first one.

This means all your debts will be handled in a single court process. You might still get a discharge for your debts in the second filing, but the chances of that happening are lower compared to filing separately.

Why File for Bankruptcy More Than Once?

There are several reasons someone might need to file for bankruptcy again:

Why File for Bankruptcy More Than Once?

How Soon Can You File for Bankruptcy Again?

Thinking about filing for bankruptcy another time? The waiting period depends on the type of bankruptcy you filed before.

For Chapter 7, you must wait at least eight years from the date of your previous Chapter 7 filing. If your earlier case was Chapter 13, the wait is shorter—only four years before you can file for Chapter 7.

Understanding the waiting periods between bankruptcy discharges can help you plan if you are considering filing again.

Waiting periods are as follows:

These timelines ensure that bankruptcy filings are spaced out and not used too frequently to manage debts.

How Soon Can You File for Bankruptcy Again?

Exploring Alternatives to Bankruptcy

Bankruptcy is not always the best choice for every financial situation. There are other paths that might work better for resolving your debt. Some alternatives include:

The law allows for multiple bankruptcy filings to help people recover financially. However, before choosing this route, take time to explore other options. Solutions like debt consolidation or settlement can often have a smaller impact on your credit score and might better fit your needs.

Bankruptcy should be considered only after you have tried other ways to address your financial challenges.

If you are in Detroit and thinking about filing for bankruptcy for a second time, contact Frego & Associates’ bankruptcy attorneys today.

FAQs

Do I need a certain income to file Chapter 7 in Detroit?

Yes, you must pass the means test to see if your income is low enough for Chapter 7.

Can bankruptcy stop my paycheck from being taken in Detroit?

Yes, filing for bankruptcy can stop wage garnishments right away.

Where do I go to file for bankruptcy in Detroit?

You file at the U.S. Bankruptcy Court in the Eastern District of Michigan.

Sources:

[1] O’Neill, C. (2024, February 1). Multiple Bankruptcy Filings: When Can You File Again? www.nolo.com. https://www.nolo.com/legal-encyclopedia/multiple-bankruptcy-filings-when-file-again.html

[2] Bankruptcy. (n.d.). https://www.michigan.gov/reinventretirement/reinventing/crisis-management/bankruptcy

Recent Posts

Get a Free Consultation

We're available

Get a Free Consultation

Pay Nothing, Unless We Win
This field is for validation purposes and should be left unchanged.