Filing for personal bankruptcy is a difficult decision to make. Many people prefer to take responsibility for their financial circumstances whenever possible. They also typically prefer to avoid the complications that can arise after a bankruptcy, such as difficulty obtaining favorable credit terms.
A successful bankruptcy filing allows someone to discharge some of their eligible unsecured debts. This process can lead to a better household budget and less pressure on someone’s income. However, difficulty accessing new lines of credit and other lingering financial challenges may leave people struggling to improve their economic circumstances even after their discharge.
When is it possible for someone who filed for Chapter 7 bankruptcy successfully once to file again?
There is a mandatory waiting period for subsequent filings
The type of bankruptcy that someone pursues initially and the type of bankruptcy that they want to file now can affect how long they need to wait. A Chapter 7 bankruptcy is often ideal for those in a state of financial hardship. They do not have to struggle with a multi-year repayment plan but can instead move forward with the discharge of their unsecured debts relatively quickly.
Someone who has already secured a Chapter 7 discharge previously does have to wait a relatively long time to be eligible to file again. There is a mandatory waiting period after a Chapter 7 bankruptcy discharge. People generally cannot file another Chapter 7 bankruptcy until after eight years have passed.
Why would someone need to file for bankruptcy twice?
There are many reasons why someone might need to file for bankruptcy more than once. Perhaps the underlying issue that triggered their bankruptcy was medical debt. If their condition does not fully resolve, they could end up once again struggling with huge medical debts. A lack of income could also be an issue. Someone who loses their job and cannot find comparable work might struggle for years to regain their financial equilibrium.
Sometimes, even the credit opportunities that people have after bankruptcy can put them at risk in the future. Early credit offers after a discharge often involved fees, security deposits and higher interest rates. People can very quickly end up trapped in debt again after their first bankruptcy and in need of additional financial relief.
Once eight years have passed, someone who has previously discharged debts through a Chapter 7 bankruptcy could potentially file again. There are no limits to how many times one person can file bankruptcy during their lifetime as long as they comply with all applicable statutes. Before those eight years are up, a filer can seek legal guidance to explore the possibility of filing for Chapter 13 or taking advantage of other available options to get back on track financially.