Filing Bankruptcy for a Second Time - Read More Here

  • Bankrupt People

All You Needed to Know About Filing for Bankruptcy for a Second Time

In case you have been through rough financial weather, and have previously filed for bankruptcy, you do not have to worry if you find yourself in a bad financial situation again. Though bankruptcy helps you to get a fresh start, bills can start piling up again. Getting discharge previously does not mean that you cannot file for bankruptcy again. If you find yourself in a similar situation, it is important to know whether you can file for bankruptcy again in California. According to Los Angeles based law firm Recovery Law Group , it is possible to file for consumer bankruptcy or second personal bankruptcy. However, there are various factors to consider in this situation.

Filing for 2nd bankruptcy in California

A bankruptcy filing is Very common in California. Many terms bankruptcy filers end up having the same problems again and have to file for bankruptcy. In case you are having problems with handling your finances, you can record for bankruptcy 2nd, 3rd or 4th time too. Each chapter of bankruptcy has a different time frame for getting debts paid. If you have to file for bankruptcy a second time, the time frame depends on which type of bankruptcy had previously been recorded and which is under consideration at present. There are 2 main types of bankruptcy support options available to consumers.

Successive Chapter 7 Cases

Chapter 7 bankruptcy is also known as liquidation bankruptcy. In this case, debtors who qualify for the same do not have to pay back their dischargeable debts. In case you have earlier recorded for Chapter 7 release, then you have to serve for 8 complete years before filing for another Chapter 7 bankruptcy to get a discharge. Though in theory, you can record for bankruptcy the very next day of obtaining your first Chapter 7 discharge, a second discharged won’t be allowed until eight years have passed. It needs to be put in mind that the 8 years are taken from the original date of filing and not the date of discharge.

Successive Chapter 13 Cases

The wage earners bankruptcy, commonly known as Chapter 13 bankruptcy, is for people with adequate financial resources and income than those filing for Chapter 7. The Chapter 13 bankruptcy filers are expected to pay back the creditors with a repayment plan in a 3-5 years’ time frame. People who have filed for Chapter 13 previously can file for the 2nd one after a span of 2 years.

Can People File for Bankruptcy under a Different Chapter than Previous one?

As the situation changes, your chapter for filing bankruptcy can also change. The time frame for filing for bankruptcy under a chapter different than the previous one varies.

  • Chapter 7 bankruptcy followed by Chapter 13 bankruptcy: In this case, debtors need to file after 4 years from the original filing date of a successful Chapter 7 bankruptcy to be eligible for discharge under Chapter 13 in the 2nd
  • Chapter 13 bankruptcy followed by Chapter 7 bankruptcy: In this particular case, consumers need to wait 6 years from the original filing date (in a discharged Chapter 13 case) to file for a chapter 7 discharge. An exception, however, may be granted if 70% of Chapter 13 repayment plan has been satisfactorily met.

Facts to Remember About Second Bankruptcy

Just like 1st bankruptcies, 2nd bankruptcies too are public record and remain on credit reports for a period of 10 years. Depending on which bankruptcies you have filed, you will have two bankruptcies on your credit report simultaneously. However, credit score after bankruptcy improves post discharge as you make efforts to improve your finances by paying your dues on time. Before filing for bankruptcy in California, you need to follow various steps including mandatory credit counselling. Though bankruptcy filing might be a tough decision, yet it is a necessary one to make if you wish to recover from serious financial problems. Ignoring the debts is never a good option as it may lead to legal ramifications. However, life after bankruptcy can be much better as you get a chance to build your credit report. Consulting a qualified bankruptcy attorney is important in this case.