Bankruptcy can help people handle overwhelming medical debt, credit card debt and personal loans. After people file for bankruptcy, they can find relief from their financial obligations after just a few months or years, depending on whether they filed for Chapter 7 or Chapter 13 bankruptcy.
Bankruptcy does not mean, however, that the filer will never have to deal with debt again. If a filer accumulates more debt and begins struggling financially again, they may need to consider filing for a second bankruptcy (or even a third).
Bankruptcy can be filed any number of times during a filer’s life; however, there are some limitations to prevent people from abusing the bankruptcy process. Repeat filers generally need to wait several years to file for bankruptcy again. Here are the basic rules;
Chapter 7 after a Chapter 7 or Chapter 13 bankruptcy
Chapter 7 bankruptcy allows debtors to discharge debts a few months after filing if they have no other means to pay for their financial obligations. If a filer wants to file for Chapter 7 bankruptcy after a previous filing, they must wait eight years after their previous Chapter 7 filing or six years after a Chapter 13.
Chapter 13 after a Chapter 7 or Chapter 13 bankruptcy
Chapter 13 bankruptcy allows debtors to reorganize their payments if they have the potential to repay their debts. This allows people to pay off their debts over three to five years. To file for a Chapter 13 bankruptcy, debtors must wait four years if they previously filed a Chapter 7 bankruptcy or two years after a Chapter 13 bankruptcy.
Debtors who need to file for bankruptcy again should reach out for legal guidance to learn more about their options. Bankruptcy should always been seen as a way forward when debt becomes overwhelming.