You've already filed a Chapter 7 or Chapter 13 bankruptcy but you've found yourself in another heap of debt, unable to meet your obligations to your debtors. You may be wondering if bankruptcy is still an option. The answer is yes, but filing a second or subsequent bankruptcy comes with implications. Here's what you should know.
There are time restrictions
First and foremost, you must understand that there are no restrictions on how many bankruptcies you can file within your lifetime. If you have already had a bankruptcy discharged, however, there are strict time restrictions on when you can file another one. It depends on the type of bankruptcy you already filed and the one you intend on filing in the future.
There are four different bankruptcy filing scenarios that could determine when you can file again. These include:
- Chapter 13 to Chapter 7: If you have already filed a Chapter 13 and you intend on filing a Chapter 7, you must wait at least six years after the Chapter 13 has been discharged. There are some cases in which you can file a Chapter 7 prior to the six-year mark, but 70-100 percent of the unsecured debt in your Chapter 13 must be paid off.
- Chapter 7 to Chapter 13: After a Chapter 7 bankruptcy has been discharged, you must wait four years from the filing date to file a Chapter 13.
- Chapter 13 to Chapter 13: Once a Chapter 13 has been discharged, you may file another one immediately. In most cases, you may file a second Chapter 13 two years after filing the first one.
- Chapter 7 to Chapter 7: If you previously filed a Chapter 7, you must wait another eight years before filing another one.
Discharge vs. dismissal
Whether your bankruptcy was discharged or dismissed will be a factor regarding your eligibility to file again in the future.
Once your bankruptcy has been discharged, your financial obligation to the debt involved is no longer valid. If your bankruptcy has been dismissed, however, you still have an obligation to your creditors. For example, if you have already filed a Chapter 13, but are unable to pay the monthly installments, your case may be dismissed without a discharge.
If your bankruptcy case has been dismissed, you may be eligible to file for another one. Once you file, the automatic stay (which halts all collection efforts from creditors) goes into effect and is valid for 30 days after your case has been dismissed. If you have a history of filing bankruptcies that have been dismissed, however, the court may suspend or eliminate the automatic stay.
If the court suspects abuse of the bankruptcy system, a court order may be issued to prevent you from immediately filing a subsequent bankruptcy.
If you're struggling to pay your debt and are considering another bankruptcy, it's best to consult with an experienced attorney who fully understands how the system works. For more than 30 years, the South Carolina attorneys at Benjamin R. Matthews and Associates, LLC have effectively helped guide thousands of clients through the process. If you have any questions, contact us online and set up a free initial consultation with our legal teams.