Filing for Bankruptcy a Second Time

If you have previously filed for consumer bankruptcy, can you file for bankruptcy again? According to an article in the Wall Street Journal, both individuals and businesses often become repeat filers of bankruptcy, and some commentators believe that someone must be to blame when a party files for bankruptcy more than once. Should bankruptcy courts be concerned about serial filers? Or should we think about multiple bankruptcy filings as actions that often are necessary for debtors to become financially healthy and reliable consumers?
Serial Filing in Bankruptcy Court
What is a serial filer, exactly? When you hear about serial filing, it refers to individuals or businesses who are repeat—or in some cases chronic—bankruptcy filers. In other words, serial filers are parties who seek bankruptcy protection more than once. However, filing for bankruptcy on more than one occasion doesn’t necessarily mean you are a serial filer. Although some repeat filers will file again in fewer than two years, many repeat bankruptcy filers have a gap of eight years or more between bankruptcy filings. While the average is three years between filings, many debtors wait almost a decade before they seek bankruptcy protection again.
Should we be skeptical of individuals who file for bankruptcy a second time with less than 24 months between filings? Some bankruptcy courts do have concerns about repeat filings, but by and large, the U.S. Bankruptcy Code limits the rate of bankruptcy discharges for consumers who need to file more than once (or more than a couple times).
Bankruptcy law doesn’t specify a minimum amount of time that a debtor must wait before filing for bankruptcy a second time, but it does prevent multiple bankruptcy discharges from taking place in too short a time. Generally, whether you can receive another discharge of your debts depends upon when you file, as well as the chapter under which you seek bankruptcy protection.
Chapter 7 Versus Chapter 13 Filings
Let’s say you have already filed for Chapter 7 bankruptcy and you want to file a second time. You will need to wait eight years before being eligible for another discharge under Chapter 7. How does the waiting time differ between a liquidation bankruptcy (e.g., Chapter 7) and a reorganization (e.g., Chapter 13)? Let’s say instead you have previously filed for Chapter 13 bankruptcy and received a discharge. Now, unless the court refuses to confirm your repayment plan the second time around, you may only need to wait two years for a second discharge.
But the rules change a bit when you first file for Chapter 7 and later want to file for Chapter 13, or vice versa. In short, you will need to wait longer to first file Chapter 13 and later file again under Chapter 7. However, the details are quite complex, and it is important to seek help from an experienced bankruptcy attorney.
Contact a Chicago Bankruptcy Lawyer
Bankruptcy is complicated, even if you are filing for the first time. If you have questions about how filing for Chapter 7 or Chapter 13 bankruptcy might help you, you should be sure to discuss your situation with an experienced Chicago bankruptcy lawyer. If you have filed for bankruptcy in the past and have concerns about whether you will be able to discharge debts in a subsequent proceeding, contact the Emerson Law Firm to learn more about how we can help with your case.
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