What if I need to file for bankruptcy a second time?

What if I need to file for bankruptcy a second time?

On Behalf of | Sep 30, 2021 | Bankruptcy |

Financial problems can happen to anyone throughout New York State. This is true regardless of their education, employment and personal circumstances. Sudden illness, an unexpected societal challenge, medical expenses, job loss, divorce and other issues can spur an inability to keep up with financial obligations. For some, this has happened in the past and they chose to file for bankruptcy. While this helps to get back on stronger ground and essentially have a restart, some might need to file for bankruptcy again. Knowing if this is possible and how to go about getting a second discharge is key.

There are time constraints for a second Chapter 7

Once a person has received a discharge of their debts in a Chapter 7 bankruptcy, they cannot file for Chapter 7 again for eight years. The same is true if the person had previously filed for Chapter 11 and received a discharge. For those who previously filed for a Chapter 12 or Chapter 13, they must wait six years except in certain cases. A Chapter 7 filing can be made if the debtor paid the “allowed unsecured” claims from the previous case in full or they paid a minimum of 70% of those claims while adhering to the plan in good faith with a legitimate attempt to pay. Chapter 12 is for family farmers and fishermen. Chapter 13 is used by people who want to retain certain properties and make their payments to a trustee for three or five years.

Facing financial problems is nothing to be embarrassed about

It can be difficult for a person to admit they are unable to pay their debts. Whereas they could have been initially reluctant to file for bankruptcy, its value personally, financially and emotionally is clear. Not only does it eliminate unsecured debt like credit cards and medical debt, but it gives the person a fresh start. However, there are times when they again run into financial turmoil and the same problems come up again with missed payments, debt collectors calling and the fear and concern that surrounds overwhelming debt. It is important to understand that it is possible to successfully file for Chapter 7 even after a previous discharge.

Bankruptcy cases inevitably require professional advice

Just as a first bankruptcy filing generally requires legal assistance, it becomes even more imperative when there is a second filing. With the current situation impacting many people, it is not uncommon for debts to pile up and people needing to consider another bankruptcy filing. To assess whether it is possible, having experienced advice can help to reach a positive outcome and start over again.