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Multiple Bankruptcy Filings Not Uncommon

September 7, 2012

Superstar Toni Braxton has joined the hundreds of thousands of people each year who file for their second or subsequent bankruptcy. girl.jpg

Los Angeles Chapter 7 Bankruptcy Lawyer Vincent Howard understands that a recent study by the American Bankruptcy Institute indicates that about 8 percent of bankruptcy filings were from someone who had undergone bankruptcy protection before.

The ABI gathered statistics from 94 judicial districts throughout the country. Although repeat filers varied significantly from district to district, 8 percent was the average.

Researchers were quick to say that while there are those who abuse the system by filing repeatedly simply to avoid paying their debts, this does not describe the majority of repeat filers.

The fact of the matter is: times are hard. Often, it has nothing to do with whether a person is responsible with his or her money. Given that most bankruptcies are caused by circumstances in our lives beyond our control or for which we weren't planning (i.e., job loss, divorce, a medical crisis), it's not unreasonable that a person may suffer more than one of these in a lifetime.

The study authors noted that there has only been a limited amount of research in this field, and the previous studies that have been conducted focus on only a limited number of areas or time frames.

Given that repeat bankruptcy filings are not something people like to discuss, researchers here opted to examine the actual filings and compare social security numbers, rather than survey people over the phone or in a mail questionnaire.

Generally, if your Chapter 7 bankruptcy was dismissed for any reason, such as a failure to file proper, timely paperwork, you can refile at any time. However, if your debts were actually discharged in a Chapter 7, you have to wait eight years before you file again.

For Toni Braxton, it was 12 years. The first time, in 1998, she says she was the victim of a predatory record deal. For example, she claims she earned just $2,000 for her hit single, "Unbreak My Heart." She filed again in 2010 (with her debts just recently having been discharged), after a medical ailment caused her to cancel several key performances in Las Vegas. A number of creditors came after her to pay up as a result.

Few of us are juggling recording labels, but we can all sympathize with a medical ailment derailing our careers and compounding our debt woes.

ABI researchers were able to break down the repeat filers into the following categories:

  • A debtor who had a Chapter 7 discharge granted more than six years prior and required another discharge;
  • A debtor who had a Chapter 7 discharge and now was subsequently requesting a Chapter 13 reorganization;
  • A debtor who was granted a discharge less than six years ago, and erroneously filed before they were legally allowed;
  • A debtor whose bankruptcy petition had been dismissed for technical reasons and sought to refile;
  • The debtor who filed repeatedly simply in order to obtain the relief of the automatic stay.
Whatever your reasons for needing to file again, we can help. We'll look at your case to first make sure you are eligible to file and then discuss the best form of filing for your situation.

Los Angeles Bankruptcy Attorney Vincent Howard at HOWARD LAW can help. You can reach us toll-free at 1-800-872-5925 or send us a message online.

Additional Resources:
The Broke and the Beautiful: Toni! Toni! TonĂ­! Edition, Sept. 7, 2012, By Melanie Cohen, The Wall Street Journal

More Blog Entries:
Los Angeles Bankruptcy: Can You Inherit Debt? Aug. 30, 2012, Los Angeles Chapter 7 Bankruptcy Lawyer Blog