The Time on Filing for Bankruptcy Again
The primary purpose behind filing for bankruptcy protection is having the opportunity for a fresh financial start. The bankruptcy process is designed to help consumers wipe out their debts or receive an extended amount of time to repay them. Ideally, bankruptcy is a one-time event in your life, but some people continue to experience financial issues afterward. There is a time limit on filing for bankruptcy again, when you have previously filed and received a discharge.
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Filing Chapter 7 Again
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By filing for Chapter 7 bankruptcy protection, you are asking the court to eliminate or discharge your debts. To do this, the court appoints a bankruptcy trustee who oversees the sale of your assets to pay your creditors. Chapter 7 bankruptcy has long-term implications in regards to your future financial options. Your credit rating takes a dive, the bankruptcy remains on your credit report for up to 10 years and your access to future credit, loans and decent interest rates is severely limited. Filing for Chapter 7 the first time, should be a choice of last resort, but if you come upon the need to file again, you must wait eight years.
Filing Chapter 13 Again
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With Chapter 13, you are asking for time to reorganize your finances and repay your debts. You are required to file a repayment plan with the bankruptcy court, outlining how much you can afford to pay each month, to repay most or all of your creditors over a three- to five-year period. At the end of the repayment period, most of the remaining debts are typically discharged. You can file for Chapter 13 as often as you like, but if you already received a discharge in your prior case, the time on filing for bankruptcy again is two years. The two-year restriction really does not have much bearing as a typical Chapter 13 repayment plan takes more than two years to complete.
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Filing Chapter 7, Then Chapter 13
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If you file for and receive a discharge under Chapter 7, you can file Chapter 13 immediately. However, none of the remaining debts at the completion of your Chapter 13 repayment plan will be discharged, if it has been less than four years since you first filed for Chapter 7. It is possible to use Chapter 13 to take advantage of the automatic stay (creditors must stop trying to collect) and extend the repayment period for any debts not discharged in your Chapter 7 case or make up mortgage arrears if you still have your home.
Filing Chapter 13, Then Chapter 7
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If you filed for Chapter 13 bankruptcy and received a discharge upon the completion of your repayment plan, how soon you can file for Chapter 7 depends on how much of your unsecured debt was repaid. If you made an earnest effort and repaid over 70 percent of what you owed to unsecured creditors (such as credit cards or medical bills), then you are eligible to file for Chapter 7 immediately. If you repaid less than 70 percent under your repayment plan, you must wait six years before filing for Chapter 7 bankruptcy protection.
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