Sometimes people who have filed bankruptcy find themselves needing to file bankruptcy again. There are many different circumstances that can cause a person who has filed bankruptcy to find themselves again struggling with overwhelming levels of debt.
Going through bankruptcy a second time is not exactly a pleasant thought – but if you’re struggling with debt, and you think you may need to file bankruptcy again, it’s important to know what your options are.
Let me start by saying that the bankruptcy laws don’t limit how often a person can file bankruptcy. Technically, a person could file bankruptcy every year if they wanted.
However, the bankruptcy laws do limit how often a bankruptcy filer can receive a bankruptcy discharge i.e. have his or her debts legally forgiven, canceled, wiped out, etc. And getting a discharge of debts is generally why a person files bankruptcy.
If you need another discharge of debts, then you must wait a certain amount of time between your bankruptcy filings.
The amount of time you must wait depends on what type of bankruptcy you previously filed and what type of bankruptcy you intend to file this time. Here are the rules:
If you previously received a Chapter 7 discharge, you must wait 8 years before you can receive another Chapter 7 discharge (11 USC 727(a)(8)) and 4 years before you can receive a Chapter 13 discharge (11 USC 1328(f)(1)).
If you previously received a Chapter 13 discharge, you must wait 2 years before you can receive another Chapter 13 discharge (11 USC 1328(f)(2)) and 6 years before you can receive a Chapter 7 discharge (11 USC 727(a)(9)).
And to make matters more confusing, even though we’re talking about discharges, the above time periods are not measured from the dates of discharge but from the dates of case filing.
For example, if you previously received a Chapter 7 discharge and you are interested in receiving another Chapter 7 discharge, the rules say that you must wait 8 years. So you start with the date you filed your previous Chapter 7 case. Let’s say that your earlier Chapter 7 was filed on March 1, 2002. The next step is to count forward the appropriate number of years which in this example is 8 years (Chapter 7 to Chapter 7) which gives you a date of March 1, 2010. This means that you would not be eligible for another Chapter 7 bankruptcy discharge if you filed today which is May 22, 2009. Instead you would need to wait to file until next March 1. However, in this example, you would be eligible on today’s date for a Chapter 13 discharge since the waiting period from Chapter 7 to Chapter 13 is only 4 years, you would have become eligible to file your second case beginning March 1, 2006.
Lastly, as in all things bankruptcy, there are some exceptions to the above rules. Therefore, you should seek the advice of a knowledgeable bankruptcy lawyer regarding your specific situation.
If you have filed bankruptcy before and are thinking that you need to file bankruptcy again, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.
Source: Adapted from an article by New York attorney Jay Fleischman at Bankruptcy Law Network.