Can I File for Bankruptcy Relief a Second Time?

Most people who file bankruptcy, they never want to go through the experience a second time. Even people who have a smooth bankruptcy case do not want to be in a financial situation again that requires the assistance of the bankruptcy court. The bankruptcy filing itself was a relief, but dealing with debts that they could not pay was stressful and frustrating. They do not wish to face another situation like that again that forces them to research bankruptcy options.

Unfortunately, many people go through multiple events during their lifetime that can cause a financial hardship. They can recover from some of these financial hardships, but other situations are too overwhelming to overcome without assistance. Fortunately, bankruptcy relief is not a “one and done” process. You can file multiple bankruptcies during your lifetime if necessary.

If you are experiencing debt problems, a bankruptcy lawyer might be able to help. Whether this is your first bankruptcy filing or not, bankruptcy attorneys offer a free consultation so that you can discuss your situation and gain advice from an experienced bankruptcy lawyer.

Schedule your no-cost, no-obligation case review with an experienced bankruptcy lawyer.

Why Would Someone Need to File Another Bankruptcy Case?

People file for bankruptcy relief for many reasons. Some of the common factors that play a role in why a person may need assistance from the bankruptcy court include:

  • Death of a spouse
  • Divorce
  • Accidental injury
  • Decrease in income
  • Sudden illness
  • Unemployment
  • Business failure
  • Financial mismanagement

Some people may go through two or more of these events within a few years creating a severe financial hardship. If they are unable to recover, they may need to file another bankruptcy case.

Filing Bankruptcy vs. Obtaining a Bankruptcy Discharge

The Bankruptcy Code does not limit the number of bankruptcy cases a person may file. In fact, you could file another bankruptcy the day after your previous bankruptcy case was closed. However, the Bankruptcy Code does limit the number of bankruptcy discharges you may have in a specific period.

A bankruptcy discharge is the goal of filing for bankruptcy relief. The discharge releases you from the legal liability you have to repay a debt. Therefore, if you file a bankruptcy case, but you do not receive a bankruptcy discharge, you still owe all the debt that you did before you filed the bankruptcy case. Your creditors can take all legal actions available to them to collect the debt.

Therefore, when bankruptcy lawyers review your prior bankruptcy filings, they are researching the case to determine if you received a bankruptcy discharge. If you were successful in your bankruptcy case, lawyers must then use the 2-4-6-8 Rule to determine if you are eligible for another bankruptcy discharge.

The 2-4-6-8 Rule refers to the number of years between case filings the Bankruptcy Code requires for a debtor to be eligible for another bankruptcy discharge. The number of years between cases depends on the chapter of your prior bankruptcy filing and the chapter of bankruptcy you intend to file now.

Filing A Chapter 7 Case After a Prior Bankruptcy Case

A Chapter 13 bankruptcy case allows you to reorganize your debts into a monthly plan you can afford. If you need to save your home from foreclosure or stop a vehicle repossession, Chapter 13 is probably the chapter of bankruptcy you need to file.

However, if you filed a Chapter 7 case in the past, you must wait four years from the filing date of the Chapter 7 case to file a Chapter 13 case. The time to file another Chapter 13 case after receiving a bankruptcy discharge in a prior Chapter 13 case is much shorter. You only need to wait two years between Chapter 13 cases to refile. Since most Chapter 13 cases take five years to complete, most people can file another Chapter 13 case at any point after receiving a bankruptcy discharge in a prior Chapter 13 case.

Filing A Chapter 13 Case After a Prior Bankruptcy Case

The time between bankruptcy discharges when your prior bankruptcy case was under Chapter 7 is a bit longer. One of the reasons for the longer time between bankruptcy discharges is because debtors discharge unsecured debts in a Chapter 7 case without repaying any portion of the debt as they do in a Chapter 13 case.

If you want to file a Chapter 7 case after receiving a bankruptcy discharge in a Chapter 13 case, you typically need to wait six years between bankruptcy filings. However, the time may be less depending on the percentage you paid to unsecured creditors in your prior Chapter 13 case. The bankruptcy attorney needs to review the filing to determine the exact length of time you must wait between a Chapter 13 case and filing a Chapter 7 case.

The length of time before you can file another Chapter 7 case after receiving a bankruptcy discharge in a prior Chapter 7 case is the longest of all the time frames. You must wait at least eight years between the filing dates to file back-to-back Chapter 7 cases.

Filing Bankruptcy is a Serious Matter

The decision to file another bankruptcy case should not be taken lightly. A bankruptcy lawyer can help you make the best decision for you and your family.

During a free consultation, a bankruptcy attorney discusses all your options for resolving debt problems, including filing a Chapter 7 or a Chapter 13 bankruptcy case. Depending on your situation, you may have other alternatives available to resolve your debt problem. After analyzing your financial situation, bankruptcy attorneys can give you their opinion of the best way for you to get out of debt and protect your property.

Call now to schedule your free case review to determine if you should file another bankruptcy case. Even if you do not fit into one of the time frames above, there could be an exception in your situation that shortens the time between bankruptcy filings to receive a bankruptcy discharge.