Can a Debtor re-file his or her Chapter 13 bankruptcy within one year of a prior case being dismissed? Before I answer the question, it is important to review and see if you have exhausted all your remedies to have your first case reinstated. Unless your case was dismissed with prejudice, Debtors can often file a Motion to Reconsider to have their case reinstated if they are able to bring their Trustee payments current.
Now back to the initial question. The answer is yes if it was the Debtor’s only dismissal in the last year and the dismissal order does not have any bar or prejudice period for a second filing. In a second filing within a year of the dismissal, the Debtor will have to do a good deal more work to protect his or her assets. The reason for this is in 2005, Congress made it more difficult to file a second case within one year of the dismissal of the first case. The new bankruptcy code states that the Debtor is only protected for 30 days after the filing of the petition unless the Debtor moves to extend the protections for the entire case. In addition, the “Motion to Extend the Automatic Stay” must demonstrate a change of circumstances from the first case and good faith factors. In our District, one judge requires a hearing with the Debtor in attendance. The other judge requires an affidavit of the change of circumstances and good faith factors.
While all this sounds overwhelming and scary for a second filing. Let me calm your nerves a little. While it is true that a significant number of Motions to Extend the Automatic Stay are denied by the Court, our judges in South Carolina have stated that even if the motion is denied, as long as the case is later confirmed by the court, creditors are bound by the terms of the plan. To make a long story short, you would not lose your house and car if you were able to make your plan payments and mortgage payment.
Here is an example of a Motion to Extend the Automatic Stay that would probably be approved by the Court. In this hypothetical case, the Debtor in the first case lost his job due to medical emergency that required him to miss work for two months. The Debtor refiled another Chapter 13 after recovering from his medical issues and finding new employment. In addition, the Debtor was able to demonstrate additional positive factors such as a wage order, proposing to pay his unsecured creditors 25%, a high employment salary, no other bankruptcy filings, and a finding that most of his unsecured debt was for medical reasons.