Facing a bankruptcy case dismissal can be a huge blow to the debtor in financial trouble. But there is hope. A bankruptcy debtor can refile their case even after a dismissal but they may not have the full protection of the automatic stay. Debtors who had a bankruptcy case dismissed, will only have the protection of the automatic stay for thirty days if they refile their bankruptcy case within a year. However, if the debtor can prove that they filed their second bankruptcy in good faith, they may be able to regain the full protection of the automatic stay. Here’s what you need to know:
- It is very likely that a creditor will bring a “bad faith” claim against you if you filed two or more bankruptcy petitions within a year. Filing a bad faith charge is usually an attempt by the creditor to have the bankruptcy case dismissed again.
- The bankruptcy court has no official definition of what a good faith bankruptcy filing is, but generally speaking a good faith bankruptcy is one filed with the intention of simply discharging impossible to pay debt and/or restructuring your debts for the purpose of repaying them.
- A debtor refilling their bankruptcy case after a dismissal need to make sure that all of their paperwork is in order so that there is no appearance of a bad faith filing. For example, filing a bankruptcy petition with missing or inaccurate asset and income information could immediately raise suspicions of a bad faith bankruptcy filing.
- Also, a debtor refilling a bankruptcy case which previously was dismissed should take care to correct any mistakes made which resulted in the initial dismissal of their case.