Filing for bankruptcy is a difficult and often emotional decision. It is not a choice that should be taken lightly nor is it a casual solution to one’s financial problems. When it comes to filing for bankruptcy there are many pros and cons to be considered. This is especially true when considering filing for the second time. Filing for bankruptcy twice is possible but all options should be weighed carefully with the assistance of a professional prior to making that decision.
What To Consider Before Repeat Filing For Bankruptcy
Before you file for bankruptcy, it is important to know that a Chapter 7 bankruptcy can remain on your
credit report for 10 years. When you file Chapter 7 all of your unsecured debts are completely eliminated with the exception of student loans, yet filing often takes an emotional toll on an individual. This is just after filing for bankruptcy and being discharged once. What if you are stuck with an unforeseen circumstance that lands you deeper in debt than the first time you filed for bankruptcy? Can you even file for bankruptcy twice?
The short answer is yes, you can file for bankruptcy twice, and even three times.
The most common types of personal bankruptcy are Chapter 7 and Chapter 13. Up to 65% of all U.S. consumer bankruptcy filings are Chapter 7 cases. Chapter 7 Bankruptcy and Chapter 13 Bankruptcy, while very similar, have important differences that will affect your case and how often you can file for bankruptcy. Both Chapter 7 and Chapter 13 bankruptcies may be filed multiple times.
The Rules For Filing For A Second Time
There are rules that apply about when you can next file for bankruptcy and that is based on what bankruptcy code you were previously discharged from. To file for a second or third bankruptcy, there is always a waiting period between receiving a discharge from your financial obligations and filing again for bankruptcy.
If you did not receive a discharge from your previous bankruptcy filing, then you are not barred from filing again for bankruptcy. On the other hand, if you file again prior to letting the time elapse you will not receive a discharge and your debts will remain intact.
Discharge For Chapter 7 Bankruptcy
The typical time frame from filing for a Chapter 7 bankruptcy to being granted a discharge (or relief from debt) is 3-6 months. Once you have received a discharge from a Chapter 7 bankruptcy, you will be required to wait 8 years from the date of filing to be able to file for bankruptcy twice. Filing anytime before the end of that 8-year waiting period will result in the denial of your discharge in the second case. If that happens, you will be legally liable for all of your debts.
The exception to this is if you received a discharge from a Chapter 7 bankruptcy and want to file for a Chapter 13 bankruptcy. In this case, you must only wait 4 years from the date of the Chapter 7 bankruptcy filing to file for the Chapter 13.
Discharge For Chapter 13 Bankruptcy
Once you have received a discharge from a Chapter 13 bankruptcy, you will be required to wait 6 years from the date of filing to be able to file for a Chapter 7 bankruptcy. Filing anytime before the end of that 6-year waiting period will result in the denial of your discharge in the second case. If that happens, you will be legally liable for all of your debts. The exception to this 6-year waiting period is if you paid 100% of your unsecured debts, or if you received a Chapter 13 relief in good faith after paying at least 70% of your unsecured debts.
If you have received a discharge in a previous Chapter 13 bankruptcy, then you must wait 2 years from the date of the first filing to file another Chapter 13 bankruptcy. Doing so prior the 2-year waiting period will result in the denial of your discharge and you will be liable for all debts that went unpaid throughout the Chapter 13 bankruptcy.