Personal bankruptcy is a powerful tool for getting out of uncontrollable debt and returning to financial health. That said, it doesn’t eliminate every type of debt or prevent new financial problems from arising. Sometimes people get out of the bankruptcy process, and a year or two later they face a setback and find themselves in financial trouble again.
Can you file for Chapter 13 bankruptcy a second time?
The short answer to this question is “It depends on the circumstances.” The eligibility requirements for personal bankruptcy include limits on how often people can take advantage of bankruptcy protection.
Generally, a person who has gone through Chapter 13 bankruptcy must wait two years before filing for Chapter 13 again. The limits are more stringent for Chapter 7. A person who has gone through the whole Chapter 13 process must wait four years before filing for Chapter 7.
If a person has gone through Chapter 7, they must wait six years before filing for Chapter 13. They must wait eight years before filing for Chapter 7 a second time.
In some circumstances, debtors can file for one type of bankruptcy immediately after the other, although doing so may limit the types of debts they can discharge.
The good news is that debtors who are able to wait the full period between filing bankruptcies have certain advantages. A person who files for Chapter 13 four or more years after going through Chapter 7 can have low monthly payments on their Chapter 13 repayment plan and still take full advantage of Chapter 13’s debt-discharging provisions.
There are many complicating factors in bankruptcy law, and sometimes the trouble is in the details. Those who are getting overwhelmed with debt can speak to an experienced debt relief attorney to examine all their options. Personal bankruptcy isn’t always the best option for everyone at every point in their lives, but when it works, it is one of the most powerful tools available. When it doesn’t work, there may still be other tools in the toolbox.