Can I file for bankruptcy more than once?
Personal bankruptcy law is clear on at least one thing. Lawmakers and the courts have decided that it’s better for society to give you another chance to participate in the economy than it is to ensure that you won’t. If you’re buried under a mountain of debt, your ability to contribute to economic growth is severely limited. As such, bankruptcy laws provide a way for you to get back on your feet. Whether your original bankruptcy was filed under Chapter 7 or Chapter 13, it is possible to file a second time for the fresh start bankruptcy law is designed to provide, but there are certain limitations.
A Chapter 7 bankruptcy, often referred to as a “liquidation,” is a process whereby you liquidate most, if not all, of your assets to obtain a discharge for most, if not all, of your debt. A Chapter 13 bankruptcy is a “reorganization.” Under Chapter 13, you typically work with a bankruptcy attorney, the court and your creditors to restructure your debt. After developing a repayment plan with a realistic basis, you make payments to the court which in turn makes payments to your creditors.
Here are the rules on filing more than once:
If you want to file under Chapter 7 for a second time, you must wait eight years to be able to file again.
If you want to file under Chapter 13 for a second time, you must wait two years to be able to file again. Because it will usually take several years to complete the repayment plan you arranged during your original filing, you will usually be able to qualify for a second discharge after completing the first case.
If the original bankruptcy filing was under Chapter 7, and you want to file again under Chapter 13, you’d be eligible for a new discharge four years after the initial Chapter 7 filing date.
Filing for Chapter 13 following a Chapter 7 is popular because it can help you pay of high priority debts like recent taxes, past due domestic support, or even missed auto or mortgage loan payments that have arisen since your first filing.
Finally, you can file for Chapter 7 bankruptcy after having previously filed for a Chapter 13 discharge if you wait at least six years between filing dates. However, there is an important caveat. If, in the previous Chapter 13 filing you paid back between 70 and 100-percent of your unsecured debts, and you made your best, good faith effort to do so, the six year waiting period can be waived.
As you can see, there are many ins and outs to bankruptcy law, and there are numerous legal documents contained in a given bankruptcy filing that, if they contain errors in either content or form, can get your case thrown out. That’s why most filers seek professional legal advice from a bankruptcy attorney like the ones that can be found at Fair Fee Legal Services.