There are times when financial disaster strikes, leaving us with very few choices. It is not uncommon for some people to need bankruptcy protection more than once in their life. With all the conflicting information about when a person can file for bankruptcy a second time, people experiencing financial troubles can become more overwhelmed. You might have heard that in order to file bankruptcy a second time, you have to wait a specified period of time. The truth is, there is no limit to how many times you are allowed to file for bankruptcy, but there are limits to the outcome of your repeated filings.
Technically, there is no limit on when you can file for bankruptcy a second time, but there is a limit on when you can receive a discharge your debts for the second time. If you meet the eligibility requirements to file for bankruptcy, you may file for bankruptcy again. In order to receive a Chapter 7 discharge, you must wait 8 years after a previous Chapter 7 filing; or 6 years after a previous Chapter 13 bankruptcy was filed. To receive a Chapter 13 discharge, the waiting period is 4 years after a previous Chapter 7 filing or 2 years after a previous Chapter 13 bankruptcy filing.
As with any bankruptcy filing, you cannot receive a discharge of student loan debt, tax debt, child or spousal support payment debts, or any debts accrued through criminal or negligent actions. Although some debts may be able to receive a discharge through a second bankruptcy filing, it may not always be in your best interest to do so. If you have more secured debts such as mortgages, collateral-based loans; you will not be able to receive a discharge of these types of debts. Having more secured debts than unsecured debts (such as credit cards, medical bills) may not provide you with the debt relief you need when filing for bankruptcy a second time. On the other hand, unsecured debts are dischargeable in bankruptcy, and filing a second time may provide you with the debt relief you are seeking.
There are some cases in which you are not allowed to file a second bankruptcy for at least 180 days after a bankruptcy dismissal. The debtor is responsible for completing a credit counseling course and filing the necessary paperwork before their bankruptcy case can receive a discharge. Failure to complete the necessary court orders can result in a dismissal of the bankruptcy case. If your case was dismissed due to failure to comply with the orders of the bankruptcy court, you may be prohibited from filing again within 180 days.
Filing for bankruptcy a second time can affect whether you are protected from creditors through an automatic stay. During the bankruptcy process, the automatic stay halts collection attempts from creditors. If your previous bankruptcy case is dismissed, you may not receive the full protection of the automatic stay. Typically, the automatic stay will only apply for 30 days after a second bankruptcy filing. In order to receive the full protection of an automatic stay, you must plead your case in court to demonstrate your legitimate need for protection during your current bankruptcy case.
Whether filing for bankruptcy protection for the first time or anytime thereafter, it is wise to seek counsel from a qualified bankruptcy attorney. Bankruptcy attorneys have experienced professionals that can guide you through the process during your difficult time.
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