Savings and Finance

Can I File for Bankruptcy a Second Time?

file for a second bankruptcy

A total of 794,960 bankruptcies were filed in 2016, of which 490,365 of these were for Chapter 7, while 296,655 were for Chapter 13 according to bankruptcy statistics with the US courts. Only 461 bankruptcies were filed in 2016 for Chapter 12 and 7,292 for Chapter 11.

Even with so many filings, there is still a negative connotation about bankruptcy. This is unfortunate, as there are many factors beyond your control that could lead you into debt – a sudden medical expense, job loss, economic hardship. According to a top bankruptcy attorney in Scottsdale the laws of bankruptcy are aimed to help you, not hurt you. In fact, filing for bankruptcy is often the smartest move according to this report published by the Huffington Post.

Many people fall into economic hardship more than once, so it’s not unusual to ask whether a bankruptcy filing can be done the second time. Can you do it? Let’s find out.

You Can Make a Second Filing

First, the good news. There is no absolute or automatic bar that prevents you from filing for bankruptcy, even if you have done so before. However, there are some restrictions that are in place to prevent abuse and ensure that people cannot evade creditors through this route.

Whether you can file for a second bankruptcy or not depends on,

  • The type of bankruptcy you filed for previously (Chapter 7 or Chapter 13)
  • How long back did you make this filing

You have to satisfy guidelines, prerequisites, and benchmarks for a repeat filing.

Conditions Apply If You Have Filed for Chapter 7 Bankruptcy Before

If you have filed for a Chapter 7 bankruptcy before, then it is mandatory that you wait for 8 years from the date of your first filing before you can file again. On the other hand, if you had filed for a Chapter 7 bankruptcy before, and now want to file a Chapter 13, then you must wait for 4 years from your first filing date.

Guidelines for Filing a Subsequent Chapter 13 Bankruptcy

You can file for Chapter 13 bankruptcy a second time, but there are a few prerequisites. For instance, you are not allowed to make the filing if a bankruptcy court order dismissed your previous filing in the last 180 days because of a violation or if the court allowed the creditor to pursue collection and you dismissed the case voluntarily.

The number of bankruptcy filings has increased over the years, with the peak coming in 2005 when an estimated 1 in every 55 US homes went bankrupt. Don’t feel bad if you have to file for bankruptcy. Sometimes, this is the right way ahead. It is best to seek bankruptcy consultation to formulate a good plan, going forward.


Photo by Aidan Bartos on Unsplash

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