The ability to file for bankruptcy again depends on several factors, including the type of bankruptcy previously filed and the type of bankruptcy you intend to file next. The law sets specific waiting periods between bankruptcy filings to prevent abuse of the system. However, these rules also provide an opportunity for honest individuals to regain control of their finances when necessary.
Filing for bankruptcy a second time may involve different considerations compared to the first filing. Your financial situation, the type of debts you have, and your goals for seeking bankruptcy protection again will all play a role in determining the best course of action. This discussion will clarify the timelines and conditions that govern subsequent bankruptcy filings, which can help you navigate this complex process.
The Waiting Period Between Bankruptcies
The Bankruptcy Code sets mandatory waiting periods between successive bankruptcy filings. The most common types of bankruptcy for individuals are Chapter 7 and Chapter 13, and each has its own specific waiting rules.
Chapter 7 After Chapter 7
If you previously filed for Chapter 7 bankruptcy and received a discharge, you must wait eight years from the date of the first filing before you can file for Chapter 7 again. This extended waiting period reflects the severe nature of Chapter 7, which involves liquidating assets to pay off creditors and discharging most remaining debts.
Chapter 13 After Chapter 7
For those who previously filed for Chapter 13 bankruptcy, the waiting period before filing for Chapter 7 is six years. This waiting period can be waived under certain circumstances, such as if you paid off all unsecured debts or at least 70% of the debts in a repayment plan that was proposed in good faith.
Chapter 7 After Chapter 13
If you previously filed for Chapter 7 and now wish to file for Chapter 13, the waiting period is four years. This option may allow someone to discharge unsecured debts through Chapter 7 and then use Chapter 13 to manage secured debts, such as a mortgage.
Filing for Chapter 13 After a Previous Chapter 13
The waiting period for filing Chapter 13 after receiving a discharge from a previous Chapter 13 is shorter than for other combinations. You only need to wait two years from the date of the first Chapter 13 filing before you can file for Chapter 13 again. This shorter waiting period reflects the structured repayment plan nature of Chapter 13, which often benefits both the debtor and creditors by allowing for gradual debt repayment over time.
Filing Chapter 13 a second time can be particularly beneficial if new financial difficulties arise. For example, if you successfully completed a previous Chapter 13 plan but now face unexpected medical expenses or a job loss, filing for Chapter 13 again can provide the breathing room needed to regain financial stability. The new Chapter 13 plan may offer lower payments or a different approach to managing your debts.
Exceptions & Special Circumstances
In some cases, special circumstances may allow for a shorter waiting period or even immediate refiling for bankruptcy. If your previous bankruptcy case was dismissed rather than discharged, the waiting periods might not apply depending on the reasons for dismissal. For example, if the court dismisses your case due to a procedural error, you might be able to refile immediately.
Additionally, if your financial situation deteriorates significantly after a previous bankruptcy, you may be able to request an exception to the standard waiting periods. This situation could occur if you face a sudden, unavoidable financial crisis, such as a catastrophic illness or natural disaster. The court may consider such circumstances as a valid reason to allow an earlier filing.
Contact Us for Legal Assistance
If you’re struggling with overwhelming debt and considering bankruptcy, our experienced legal team at Buchalter & Pelphrey is here to guide you through the process. Bankruptcy can offer a fresh start, but it’s essential to navigate it with the right advice and support. Our attorneys are well-versed in both Chapter 7 and Chapter 13 bankruptcies and can help you determine the best course of action for your financial situation.
Contact us today to schedule a consultation and learn how we can assist you in making informed decisions about your financial future.