Bankruptcy allows someone to stop aggressive collection activity and potentially get rid of their debt through a discharge. In theory, after that discharge, the person who filed has a perfect opportunity to start rebuilding their credit.
Unfortunately, if the circumstances that led to the bankruptcy don’t change, people can find themselves still struggling financially years after they first filed. Unexpected divorce, debts that you can’t discharge like student loans and even injuries that reduce your earning potential could all leave someone in a situation where their debt becomes overwhelming again after previous bankruptcy filing.
Can you file for bankruptcy more than once if you find yourself struggling with debt a second time?
There isn’t a limit on bankruptcy filings
There is no law that establishes a specific limit for the number of times an individual can file for bankruptcy. However, there are rules that limit your right to another discharge after a previous bankruptcy filing.
The kind of bankruptcy that you filed before and the kind you intend to file this time will impact how long you have to wait before you can ask the court to discharge your unsecured debt again. If you filed for Chapter 7 the first time and plan to do so again the second time, you will need to wait eight years between filings.
If you want to file Chapter 13 after a previous Chapter 7 filing, you will need to wait four years. Those who file Chapter 13 once and then need its protection a second time have to wait at least two years, while those who file Chapter 13 and then eventually need to file for Chapter 7 will need to wait six years.
Ensure that your second bankruptcy is more successful than the first
A bankruptcy shouldn’t just be about getting rid of debt and stopping aggressive collection activity. It should also help you regain control over your financial situation, especially if it is not your first time filing.
You may need more support to tackle the complex issues in your bankruptcy properly the second time so that you can rebuild your credit this time and avoid needing bankruptcy again in the future.