If you have ever experienced the need to seek bankruptcy relief, you are well aware of the financial squeeze and sense of desperation that led to that decision. You are familiar with the legal process and the hard work it took to obtain a discharge of your debts. And finally, you are well aware of the relief of discharge and the hope of a better financial future.
Sadly, there are people who obtain bankruptcy relief, only to find themselves struggling with insurmountable debt again. It happens, we’ve seen it; and therefore, it is important to understand when it is beneficial to file a second bankruptcy.
You Will Have to Wait
Essentially, in order to seek a discharge of debt through bankruptcy a second time, you will have to wait. How long will you have to wait? It basically depends on what type of bankruptcy relief you obtained in the past, and the type of bankruptcy relief you intend to pursue in the future.
For your reference, Chapter 7 bankruptcy allows a debtor to obtain a discharge within three to six months of filing. In contrast, Chapter 13 bankruptcy involves the creation of a repayment plan to pay off creditors over a three to five year period.
If you have obtained a discharge through Chapter 7 and want to seek discharge through Chapter 7 again, you will have to wait at least 8 years from the first bankruptcy filing.. If you have obtained Chapter 13 relief and want to file another Chapter 13 bankruptcy, then you will have to wait at least 2 years from when you first filed. Why is there a difference in the waiting periods? Because of the much different length of time it takes to obtain discharge under each chapter
In contrast, the waiting period to seek relief under a different chapter than your original bankruptcy proceedings is different. This is based on the different nature and duration of these two types of bankruptcy proceedings. To get a discharge under Chapter 13 following a prior Chapter 7 discharge, you will have to wait at least four years from the date of the Chapter 7 filing. And vice versa, to obtain a Chapter 7 discharge when you had previously obtained a Chapter 13 discharge, you will generally have to wait six years to file.
What If I Don’t Wait?
If you fail to wait the aforementioned amount of time to file a second bankruptcy proceeding, you risk not being able to obtain a discharge. Further, filing too quickly after your last discharge might open you up to a dismissal of your bankruptcy case-which further hinders your ability to file bankruptcy again in the future. Sometimes you might still benefit from filing a Chapter 13 case immediately after getting a Chapter 7 discharge. This is usually called a Chapter 20 bankruptcy. This is because a discharge is not the only function of a Chapter 13 bankruptcy. A Chapter 13 plan can also be used to pay both secured and unsecured debts over time, which does not depend upon getting a discharge and therefore can help you save a home when the mortgage is in arrears.
You Need an Attorney to Defend Your Legal Rights
Bankruptcy offers people a chance to breathe and to move forward. At Levitt & Slafkes, P.C., we find that this relief is incredibly powerful and we pride ourselves in helping our clients get there. For over thirty years, we have provided clients with intelligent, professional, and compassionate legal representation. We know that people come to us in their hours of need and take this responsibility very seriously. Let us assist you in obtaining debt relief. Contact our office by telephone at (973) 323-2953 to schedule an appointment, or contact us online.