Is it true that you cannot file again for bankruptcy?
Contrary to what some people may believe, it is possible to file bankruptcy multiple times in one’s life, although restrictions do apply.
A question that many lawyers in Florida get is, “I was granted bankruptcy 10 years ago. That means I can never file again, right?” The answer is that a person can most likely file again, sometimes even immediately. Of course, the issues can get complicated.
Filing does not equal a bankruptcy granted
One important thing to keep in mind is that a filing does not automatically mean a bankruptcy will be granted and debts discharged or restructured. So, people can and do file again even if they have serious doubts that their filing will be accepted. For instance, one reason to file for Chapter 13 right after a Chapter 7 bankruptcy is accepted is to enjoy the protections of a filing in process. For example, creditors are obligated to leave a filer alone, and a filer has additional time to catch up on some payments.
So, some people know that it is virtually guaranteed that their second filing will fail, but the temporary relief it brings makes the process worthwhile.
Filing again is not necessarily a sign of weakness
It is difficult enough for many people to file bankruptcy the first time. To have to do so again may come across as more demoralizing than they can bear. However, the same principle applies to the second time as it does to the first. Debt is not always something people can control, or fully control.
For example, suppose Bart filed bankruptcy the first time primarily because of unscrupulous credit card lenders that got him to spend a lot when he was a college student. Now, years later, he is in trouble again. He got cancer, and it meant racking up huge medical bills, especially given the fact that his insurance policy had significant limitations. Unfortunately, some people let shame or embarrassment keep them from filing again when it may be the best option.
Count on eight years for a Chapter 7 to another Chapter 7
One can file a Chapter 13 four years after a Chapter 7, to file a Chapter 7 and then file a Chapter 13 is six years. It is possible to file a Chapter 13 after a Chapter 7 in less time, but no discharge can be granted, but the automatic stay will be imposed and allow the debtor to reorganize the debts still existing after the Chapter 7 discharge. Many filings like this occur to catch up mortgage arrears or to strip off second mortgages (check with local attorneys as to your district’s policy about lien stripping as not all jurisdictions allow this).
In fact, an attorney in Florida can take stock of previous bankruptcy history and advise filers on the best options for their current situations. For instance, someone who filed for Chapter 13 may be able to file again only a few after the Chapter 13 discharge. It helps if a potential filer has fully paid off what was owed to creditors in the previous bankruptcy.