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How Often Can A Debtor Go BK

I am not a lawyer, I am a judgment matchmaking expert (Judgment Broker). This article is only my opinion, based on the laws I have studied, and what I have learned. Nothing in any of my articles can ever be considered legal advice.

In my kind of work, I often hear "My judgment debtor cannot file for bankruptcy protection" or "My judgment debtor cannot file for bankruptcy protection gain". There is very little that stops a debtor from filing for BK protection as often as they wish. However, those that file more often than the law allows, will have eventually have their request turned down (dismissed).

Some debtors file for bankruptcy protection so often, they annoy the courts, and have been considered "serial BK filers". Here is a summary of some recent changes to laws to help thwart serialBK filers:

Serial bankruptcy filers will find out that their protection from creditors will now last only 30 days, if the debtor has previously filed for a (dismissed) BK within the preceding twelve months. Even better, there will be no BK allowed (and no protection at all from creditors) if they had more than 1 previously dismissed bankruptcy within the preceding twelve months.

One loophole available to serial bankruptcy filers, is that even if their Chapter 7 bankruptcy case was dismissed for abuse, and the debtor files again under a new chapter (such as Chapter 13), the conventional protective stay from creditors remains.

Another change, for serial BK filers is that debtors cannot file for a new BK case for 180 days, after a prior case was dismissed - if the dismissal was because either they purposely failed to abide to an order of the court, or if they agreed to a creditor's request for relief from their automatic BK stay.

If your debtor is a frequent bankruptcy filer, you could find the case numbers of their recent filings for bankruptcy (in all districts) and look for dismissals or terminations, and be prepared to present this information, should you choose to appear in court.

BK is very serious. The petitioner is legally presumed to be bankrupt 90 days before to the date that their petition is filed. If a creditor takes a collection action even one day after the filing of a debtor's BK, they have violated the automatic stay mandated by federal law.

If you attempt to collect from the debtor at any time between the date they filed for bankruptcy protection, and when their case is either dismissed or terminated, you have violated the automatic stay. If you do this accidentally, return the funds to the debtor immediately.

If it was an accident, and you return the money to the debtor as soon as you learn of their BK, you will probably be ok. If you do not return the money to the debtor after finding out about of their recent bankruptcy, you may be judged to have purposely violated federal law, and will be subject to paying massive sanctions, damages, and attorney fees (and will also have to return the debtor's money.)

Once you receive notice of a BK, it does not matter if you have not already received the money directly. For example, if you had the sheriff levy the debtor's bank account one day after they filed for BK, it is your duty to take any actions required to make sure the money is returned to the debtor. In a levy situation, you would inform the sheriff in writing of the BK, and ask them to return the funds to the debtor.

Because of BK hassles, costs, and risks of violating federal law, a debtor merely starting the process of filing for bankruptcy protection causes most creditors give up and walk away, and never look back.

Debtors know that many creditors will walk away when they file for BK. Possible violation of a debtor's bankruptcy is something to be aware of, however a smart creditor will monitor the debtor's ongoing bankruptcy status. Unless the debtor is really very poor. In that case, why bother trying to collect at all?

Not many creditors are savvy enough to check on PACER on a regular basis, to check the status of the debtor's BK to determine if it succeeds (their debts are discharged), or is dismissed or terminated (their bankruptcy attempt failed).

To bring a serial bankruptcy filer to the court's attention, one can use PACER to monitor the financial paperwork, which the debtor is required to file with the court within 15 days of filing their petition.

One can appear at the 341 meeting of creditors. The debtor's paperwork may contain some helpful information, and maybe a few inconsistencies, which you can optionally explore during your 5-minute appearance at the 341 meeting of creditors.

The time limits for a debtor filing for bankruptcy again ranges between two and 8 years.

A debtor cannot get a discharge in a Chapter seven bankruptcy case if the debtor previously got a Chapter seven discharge within the past 8 years, or 6 years if they had previously filed a Chapter 13 case. The time periods in either case is measured from the filing dates, not the final results of the previous BK attempt. (See Federal Laws 11 USC 348a, and 11 USC 727a).

If the debtor had filed for a Chapter seven BK case, they must wait for four years before filing again for a Chapter thirteen BK. (See Federal Law 1328f1).

If the debtor filed for a Chapter thirteen bankruptcy case, they need to wait for two years before filing again for a Chapter 13 case. (See Federal Law 1328f2).

Debtors are not allowed to have two bankruptcies open or pending at the same time.

About Author Mark Shapiro :

Mark D. Shapiro - Judgment Broker - Free leads for Judgment Enforcers and contingency collection lawyers.
<a href="" target="_blank"></a> - is the judgment super-site where Judgments quickly get Purchased or Enforced by the best!

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Article Added on Tuesday, August 2, 2011
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