Filing a Second Bankruptcy

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.