If you've already declared bankruptcy before, you probably already know that there's a cooling off period before you can declare bankruptcy again. But is there a special process? Will it be more difficult? Here's what you need to know.
You Need to Wait 8 Years After a Chapter 7 Bankruptcy
The cooling off period after a Chapter 7 bankruptcy is 8 years. However, if you declared a Chapter 13 bankruptcy instead. you may be able to declare Chapter 13 bankruptcy after two years, or Chapter 7 bankruptcy after 6 years. So you have a lot of options available, but there is a significant waiting time.
Part of the reason that bankruptcy is a good solution is that it eliminates your debts and also guarantees creditors that you won't declare bankruptcy again for some period of time.
Serial Filings Can Trigger a Deeper Look
If you appear to be filing bankruptcy multiple times intentionally, known as "serial filing," a bankruptcy trustee may take a closer look at your situation. Even though you may meet the requirements for bankruptcy, there is a certain amount of discretion. The bankruptcy trustee may want to see whether it appears that you are intentionally driving up debt and then trying to eliminate it.
Some signs that you're attempting to abuse the bankruptcy court may be that you racked up a large amount of debt directly before filing for bankruptcy, or that you assumed large amounts of debt that it was never feasible to pay back.
Bankruptcy Isn't Always the Answer
Bankruptcy is really only the solution if you have unsecured debts that you can't pay off with your current income. There are situations in which you may need another solution. For instance, if you had significant student loans that weren't discharged in your first bankruptcy, and these student loans keep having a negative impact on your financial situation, a second bankruptcy may not help.
On the other hand, if you have credit card debt, personal debt, or medical debt, bankruptcy is an easy solution. There are a lot of reasons why someone could go into debt a second time without making any poor decisions.
If you're in debt again, you should reach out to a bankruptcy lawyer. They can give you some information regarding whether bankruptcy makes sense for you or whether you may need a different solution entirely. It may not be your fault that you're in debt, but you still need to take control of the situation.Share