Modern life is expensive, and even those with a job and the best intentions can find themselves struggling to stay ahead of their debts and their bills. Many people live on credit and then find themselves in trouble when their income changes.
Bankruptcy is often the last resort for people struggling to take control of their finances, and many people benefit from the fresh start offered under Chapter 7 bankruptcy protections. Instead of needing to repay some or all of their debts, those who qualify for Chapter 7 bankruptcy can simply discharge their debts and move on with life after court hearings.
While bankruptcy can help you get rid of unsecured debts such as credit card bills and medical debt, it can't correct underlying issues that contribute to your financial woes, such as poor job prospects or a medical condition that impacts your ability to work. Some people who file bankruptcy once will eventually need to consider it a second time. It's important for those people to understand the restrictions on second bankruptcy filings.
How long do you have to wait before filing again?
In order to protect financial institutions, lawmakers have placed a number of restrictions on bankruptcy filings. One of those important restrictions is a limit to how often someone can seek a bankruptcy discharge to prevent people from abusing the system for personal gain.
Those who enter a repayment plan under Chapter 13 filings can refile every two years. However, there is a much longer downtime between your first discharge and when you can file for Chapter 7 another time. You need to wait eight years to qualify for Chapter 7 bankruptcy protections again.
It is easy to see how you could acquire quite a bit of debt in nearly a decade. Lenders are aware of the fact that you have to wait to file again, which is why people often get flooded with credit card offers shortly after their first discharge.
You might need help for a second filing even if you did the first alone
Those who pass the means test for Chapter 7 bankruptcy typically don't have to deal with too much stress, as creditors usually aren't as keen to involve themselves in Chapter 7 proceedings as they are in Chapter 13 proceedings unless you have substantial assets.
However, if you have previously received a discharge, lenders may be more eager to claim an abuse of the bankruptcy system or show up at creditor meetings.
Because of the added pressure involved with a second or subsequent bankruptcy filing, it is often in your best interest to talk with an attorney. Your attorney can represent you and explain to you the differences and pitfalls involved in filing for bankruptcy protections more than once.