How Do You Know When It Is the Right Time to File Bankruptcy?

Interviewer: If someone were to come up to you and ask you, "How serious is filing bankruptcy?" what would you tell them?

If You Are Facing Legal Action from Unpaid Bills, Bankruptcy Can Offer a Fresh Financial Start

Vance: I always tell them it's a life changing decision and it's not an action that should be taken lightly. I consider bankruptcy the last resort. If financially you're up against the wall, your homes in foreclosure, sheriff's sale is around the corner or you're being garnished or if you're looking at repossession of your automobiles, bankruptcy could stop all that and put you on a track where you can hopefully recover.

Most people do recover and start on getting their fresh start with bankruptcy. It doesn't work for everybody but I'd say 95% of the people that file bankruptcy learn their lesson and I see very few repeat clients.

Can You File for Bankruptcy More than Once?

Interviewer: For that five percent that don't learn their lesson, do they have the ability to file more than one bankruptcy in a lifetime? What's the span of time in between filing the bankruptcies or once you've done it, or is that it, you've had your chance?

You Have to Wait 8 Years to File another Chapter 7 Bankruptcy and 3 to 5 Years before Filing a Subsequent Chapter 13 Bankruptcy

Vance: No. Chapter 7 is the most common bankruptcy. There has to be eight years between the filing dates. Now, Chapter 13, depending on what percentage plan you have, determines how soon you can file a 13 but mostly Chapter 13s last anywhere from three to five years.

You Can File a Chapter 13 Four Years Following a Chapter 7 Bankruptcy

Let's say you have a Chapter 7 and you get your discharge and then all of a sudden, you can follow that up with a Chapter 13 four years later if you need to. A Chapter 13 is something where you pay back a portion of your debt.

It just depends on the bankruptcy. Generally, if you're in a Chapter 13 for five years and you get out of it, you need to file another Chapter 13 again, you can do that but it just depends on the bankruptcy.