In this article, we discuss how often you can file for bankruptcy in Illinois and answer the following questions:
Economic uncertainty continues to loom in the wake of the growing coronavirus pandemic and with it the very real possibility of bankruptcy for many Americans. But what if you filed for bankruptcy in the 2008-09 recession? Or 10, 5, or even 1 year ago? The bankruptcy system allows for multiple filings within a given period of time, but there are strict guidelines. Filing too close together or deliberately trying to game the system can result in your case being dismissed without a chance to file again, fines, or jail time if fraud is involved.
The time period one must wait between filing for bankruptcy differs depending on whether it is the same chapter or a different one. For filing the same bankruptcy chapter a second, third, etc time in a row the rules are as follows:
This does not mean it is impossible to file bankruptcy in a shorter window than the allotted time periods, each case is unique and you may be surprised that the bankruptcy court decides to proceed with your case. By the same token, don’t be surprised if the bankruptcy court also dismisses your case whether it's too soon or within the appropriate time frame. And if you try to file again after a dismissal you may be looking at extra penalties.
As long as you’re not willfully committing bankruptcy fraud or filing for bankruptcy in bad faith you shouldn’t have to worry about any criminal or legal troubles. However, with each attempt to file bankruptcy or refiling, especially if you are trying to cut the regulated time periods short, you may be penalized. The most important penalty to be aware of, outside of doing something that is illegal, is a nullified automatic stay.
If the court dismisses your bankruptcy case for whatever reason and you attempt to file another bankruptcy in less than one year the automatic stay will only last 30 days. In subsequent filings, you may not be eligible for the automatic stay at all. In this case, your only option is to file a motion with the court asking for the automatic stay to be extended.
If the court finds that you’ve been deliberately skirting the system, such as multiple filings in order to delay creditors, the bankruptcy court will likely block you from filing another bankruptcy for a specified period of time, cut your automatic stay short, or seek legal action in more serious cases. If the court dismisses your case in this way it is referred to as a dismissal “with prejudice.”
You don’t have a lot of options if you’ve been locked out of the bankruptcy system. If your case was dismissed without prejudice you can refile for bankruptcy, or appeal your original bankruptcy dismissal. If your Chapter 7 bankruptcy was dismissed on the grounds that you don’t qualify you can still file for Chapter 13 bankruptcy. The most important first step when considering bankruptcy is seeking the guidance of an experienced bankruptcy attorney. Give us a call at 630-324-6666 and we’ll be happy to answer all your questions.
O'Flaherty Law is happy to meet with you by phone or at our office locations in: