For many people who take advantage of the bankruptcy process, their filing permanently resolves their financial challenges and allows them to regain control over their household budget. However, there are other people who find themselves still struggling even after the discharge of a bankruptcy petition.
Perhaps someone filed for bankruptcy because of health issues and had a recurrence of their underlying medical condition. Maybe someone lost their job in an economic downturn, and the industry in which they have experience has yet to recover years later. There are many reasons why someone might need to file for bankruptcy more than once.
Thankfully, the laws in the United States do permit people to file for bankruptcy repeatedly when necessary. In fact, there is no limit to the number of times an individual can file for bankruptcy in their life, at least provided that they abide by the waiting periods outlined below.
The chapter filed determines how long someone waits
The two most common forms of consumer bankruptcy are Chapter 13 proceedings, which involve a multi-year repayment plan, and Chapter 7 bankruptcy, which does not. After someone’s discharge, they will have to wait a set number of years before filing for bankruptcy again.
The length of that waiting period depends on the type of bankruptcy they filed before and the type of bankruptcy they want to file this time. Someone who previously filed a Chapter 7 bankruptcy would need to wait at least eight years from the date of their discharge to file for Chapter 7 bankruptcy again. Someone who would rather pursue a Chapter 13 bankruptcy after a previous Chapter 7 filing would only have to wait four years.
Someone who previously completed Chapter 13 bankruptcy will be subject to a variable waiting period based on how much of their debt they repaid. A subsequent Chapter 7 bankruptcy could occur almost immediately if someone repaid all of their debts or after six years if they paid less than 70% of their debt. Those filing Chapter 13 bankruptcy a second time will only need to wait two years.
Making the most out of bankruptcy can help people rebuild
It can be very difficult and stressful to navigate bankruptcy proceedings, but a timely filing can make a big difference when it comes to preserving someone’s income or their assets.
Evaluating a situation to see if someone is eligible for bankruptcy can help them determine the best way to regain control over their debt. Speaking with an experienced legal professional can help to provide this clarity.