Yes, You Can File for Bankruptcy Again

By: Justin C. Valencia

Financial problems can be very stressful.  Maybe you filed for bankruptcy once before, received a discharge, and obtained the “fresh start” that it provides.  However, if you find yourself with new financial problems, then keep in mind that you can file for bankruptcy again.  There are rules and timelines to consider, of course, and seeking the advice of an experienced bankruptcy  counsel can help you navigate them while also considering your unique circumstances.

Generally speaking:

Time limits apply to discharges, not filing.  Think of them as discharge waiting periods.  See below – Table 1: Discharge Waiting Periods.  Technically, bankruptcy law does not set any minimum time that you must wait before you can file for bankruptcy again.  However, there is a catch.  If you file too soon after your received a discharge of your debts in a prior case, you cannot receive another discharge.  Since this generally makes the second bankruptcy filing a waste of time and money, it is important to know the time frames that apply in order to receive a second discharge.  The order of filing must be considered.

A chapter 7 bankruptcy generally lasts about four months and the goal is to obtain a quick and speedy discharge of your unsecured debts.  A chapter 13 bankruptcy, by contrast, is basically a payment plan that may last for three to five years, and at the end you may obtain a discharge.

If you have previously filed a chapter 7 bankruptcy and received a discharge in that case, then you can file bankruptcy again and you can be entitled to another discharge in the following situations:

  • Chapter 7 bankruptcy – If you need to file for chapter 7 bankruptcy after you have filed a previous chapter 7 bankruptcy and received a discharge, then you need to wait eight years from the date you filed your previous chapter 7 bankruptcy.  If you file prior to the eight years, then you will be denied a discharge.  If you are denied a discharge, then you will still be legally responsible for your debts.  If you are looking to file a second chapter 7 bankruptcy, then you will want to count the eight years from the date you filed your previous chapter 7 bankruptcy.
  • Chapter 13 bankruptcy – If you need to file for chapter 13 bankruptcy after you obtained a discharge in a previous chapter 7 bankruptcy, then you will need to wait four years to obtain a complete discharge.  In order to discharge your unsecured debts, e.g., credit cards debts, medical bills, and personal loans, you need to wait four years from the date you filed your chapter 7 bankruptcy.  If you file within four years of your previous chapter 7 bankruptcy, then your unsecured debts will not be eligible for discharge.  This time limit only applies if you obtained a discharge in your previous chapter 7 bankruptcy.  The four year period begins to run from the date you filed your period chapter 7 bankruptcy.

If you have previously filed a chapter 13 bankruptcy and received a discharge in that case, then you can file bankruptcy again and you can be entitled to another discharge in the following situations:

  • Chapter 7 bankruptcy – If you need to file for chapter 7 bankruptcy after you have filed a previous chapter 13 bankruptcy and received a discharge, then you need to wait six years from the date you filed your previous chapter 13 bankruptcy.  You can obtain a full discharge of your debts in a chapter 7 bankruptcy, even if you file within six years, but you must have paid your unsecured creditors in full or 70% or more during your previous chapter 13 bankruptcy and the plan was  proposed in good faith and your best effort.  If this wasn’t the case, then you will not be entitled to a discharge.
  • Chapter 13 bankruptcy – If you received a discharge in a previous chapter 13 bankruptcy and need to file chapter 13 bankruptcy again, then you need to wait at least two years from the date of filing your previous chapter 13 bankruptcy.  If you file within two years of filing your chapter 13 bankruptcy, then you will not be entitled to a discharge in your new bankruptcy case.

In any event, if you have already filed for bankruptcy and you find yourself in dire financial straits once again, then it may be worth your time and effort to talk with experienced bankruptcy counsel.  Feel free to contact our office to set up an appointment.