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Filing a Second Bankruptcy

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Obviously, the goal in any bankruptcy filing is to make it the only one you file. That's the reason that filing for bankruptcy can also be referred to as obtaining a fresh start. You file either a Chapter 7 or Chapter 13 bankruptcy, discharge all of your debt in either, and move on to begin your financial life with a fresh start. Of course, though, life can still get in the way even after a bankruptcy has been filed, and if that's the case a second bankruptcy filing may be necessary.

The Bankruptcy Code in its various provisions outlines when a person can file a bankruptcy, whether obtaining a discharge or not in the previous bankruptcy. The most common of these situations is attempting to file a Chapter 7 bankruptcy after previously obtaining a Chapter 7 bankruptcy discharge. The Code provides in Section 727(a)(8) that you cannot file a Chapter 7 bankruptcy if you have filed one within the past 8 years. So, if you filed one on May 15th, 2005, you would not be eligible to file another Chapter 7 bankruptcy until May 16th, 2013. A slightly lighter limitation exists if you attempt to file a Chapter 13 after a previous Chapter 7, wherein if you seek a discharge in the new Chapter 13 you only must wait four years pursuant to Section 1328(f)(1). Of course, you may immediately file a Chapter 13 after the 7 has been discharged, but you cannot receive a discharge in the new 13 if it is within 4 years of the Chapter 7 discharge.

If you are looking to file a Chapter 7 after previously filing a Chapter 13, the time frame depends on how much debt was paid back in the initial Chapter 13. If in the previous case you paid back your unsecured creditors 70% or more, Section 727(a)(9)(A) allows you to file a new Chapter 7 right away. If you paid your unsecured creditors less than 70% in the initla Chapter 13, Section 727(a)(9)(B) provides that you must wait 6 years to file the new Chapter 7. Finally, if you have been successfully discharged from a Chapter 13 and are looking to file another Chapter 13, Section 1328(f)(2) provides that you must wait 2 years to file such a case.

Obviously, these are difficult concepts to master. If you have filed before and wonder if you are eligible to file again under either chapter, it is best to consult a Chicago bankruptcy attorney to assist you in this matter.

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