When you first completed the bankruptcy process and received your debt discharged you most likely assumed that it was smooth sailing ahead and that there would be no way of debt ever creeping back into your life. This just isn’t the case in many situations and a financial disaster can strike at any time. It may come in the form of an illness, layoff, divorce, or numerous other situations that life sometimes throws at us. While there are restrictions on filing for bankruptcy a second time, it is possible to achieve a second or even third bankruptcy discharge.
Restrictions on Filing Bankruptcy a Second Time
If you are considering filing for bankruptcy a second time, you must ensure you are following the guidelines set out in the US Bankruptcy Code regarding time limits. When you receive a Chapter 7 bankruptcy discharge, you must wait eight years since your first bankruptcy filing date to receive another Chapter 7 discharge and four years to receive a Chapter 13 discharge.
When you file Chapter 13 bankruptcy and receive a discharge, you must wait two years since your first bankruptcy filing date to file for Chapter 13 bankruptcy again and must wait six years from your file date before you can receive a discharge in a chapter 7 bankruptcy.
Chapter 20 Bankruptcy Exception
There is one “exception” to the time limit rules so to speak and that refers to a process called Chapter 20 bankruptcy. The key behind understanding Chapter 20 is to keep in mind that bankruptcy can be used to help catch up on secured debt payments such as your mortgage or car payment, even if you don’t qualify for a discharge. With this in mind, Chapter 20 bankruptcy is the process of receiving a Chapter 7 discharge to wipe out certain non-priority debt, and then immediately filing Chapter 13 bankruptcy in order to set up a payment plan for all other money you owe, including past due mortgage payments.
Additional Restrictions on Filing
In some situations, such as if you fail to follow court orders, file bankruptcy with the intention of delaying creditors, or attempt to abuse the bankruptcy system, the Court will dismiss your case “with prejudice”. This doesn’t sound good, and it isn’t: the Bankruptcy Court can prohibit you from filing a second bankruptcy for 180 days. This is of course if you aren’t suspected of committing bankruptcy fraud by hiding assets or trying to gift property in an attempt to deprive creditors. If you have are suspected of bankruptcy fraud, the bankruptcy court can even as far as banning you from filing bankruptcy for life.
Dayton Bankruptcy Attorney
“Should I file for bankruptcy a second time” is a deeply personal decision, and one that you are most likely aware of has long-term financial and personal consequences. If you are going through a second bankruptcy, you also know an experienced bankruptcy attorney is worth their nominal fee for assisting you in receiving the second discharge. Contact and experienced Dayton bankruptcy lawyer if you are back in debt and unable to find relief.