Can You File for Bankruptcy Twice?
See What Our Experienced Bankruptcy Lawyer Has to Say
Yes, you may file for bankruptcy twice, however, it is important to understand that bankruptcy and debt discharge are not the same. You can file for bankruptcy to get your debts discharged, but not all debts are dischargeable, and some cases do not result in discharge at all. Read on below to learn more.
Hard times are often outside of our control, and if you’ve struggled financially before, facing the same difficulties can be devastating. Recent years have taken a toll on millions of people, many of whom have pursued bankruptcy in the past and may need to file again. The Law Office of Seni Popat, P.C. has over a decade of experience helping answer our clients bankruptcy questions. Our attorney works tirelessly to meet the needs of our clients and provide sound legal counsel backed by extensive experience.
Filing for Bankruptcy Twice: What You Should Know
Filing for bankruptcy too soon after your first case may not help you discharge any debt. Depending on the type of case you file, you may need to wait several years before you can file again.
- Chapter 7: you must wait eight years before filing a second case
- Chapter 13: you must wait at least two years before you can receive a second debt discharge
While you can file twice, does the type of bankruptcy you file matter? Is filing sooner better?
If I am Filing Bankruptcy Again, When Should I Do It?
If you’re thinking of filing for bankruptcy a second time, the order is crucial. What does this mean? Well, if you file for Chapter 13 first, you may not be able to file for Chapter 7 until six years from the filing date. However, if you paid your creditors in full and/or 70% of all claims under Chapter 13, you may not have to wait to file. On the other hand, if you file Chapter 7 first, you must wait four years before filing for Chapter 13.
The Way That The Debt Is Discharged Makes a Difference
The main reason why the order matters is related to how debts are discharged under Chapters 7 and 13. Chapter 7, also known as liquidation, relieves debt by selling (liquidating) nonexempt assets to settle creditor claims. This type of bankruptcy is often a quicker debt relief solution. Chapter 13 however gives filers the opportunity to pay off debt through reorganization. A Chapter 13 payment plan takes around three or five years to complete, which explains why the waiting period for a second filing is longer.
It is also important to understand that bankruptcy can help you recover financially without total debt discharge. Chapter 13 allows you to spread out your payments over time instead of wiping them away entirely. If you can pay off your debt with an extension, Chapter 13 may be an option for you.
What If My Debts Were Never Discharged in the First Case?
In many cases, you can file for bankruptcy again and receive a discharge if you did not get one the first time, but there are always exceptions to the rule. If the court dismissed your first case, you could absolutely file for debt discharge again. However, if the court denied your initial filing, you could file again but you are not likely to receive full debt discharge.
How to File a Second Bankruptcy Case
Bankruptcy is a complex legal process, and anyone considering it should proceed carefully. NEVER attempt to file for bankruptcy without a legal representative. While filing the first time is hard enough, filing a second time can often be even more complicated.
You also have a better chance at financial recovery if you pursue bankruptcy with the help of an attorney. Bankruptcy does negatively affect your credit but building up your credit score is not impossible. If you are still in a tough spot after your first case, speak to an attorney before choosing to file again. There may be other options available for you.
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