Can You Declare Bankruptcy a Second Time?

If you have already filed for bankruptcy once in the past and you are having financial problems again, you may be considering whether or not you can declare bankruptcy a second time. The answer to this question depends on when you last filed and your current situation.

The Bankruptcy Abuse Prevention and Consumer Protection Act

The Bankruptcy Abuse Prevention and Consumer Protection Act changed the law as to the filing of multiple bankruptcies. It was passed by Congress in 2005. The greatest change this law caused was to limit who can file for Chapter 7, pushing many individuals into filing for Chapter 13 instead. Chapter 7 absolves debtors of all debts included in the filing (if approved by the court) whereas Chapter 13 only reduces the debt, leaving the debtor with a monthly debt payment. This law also changed the waiting period between bankruptcy filings.

Waiting Period Between Bankruptcy Filings

The 2005 bankruptcy law changed the waiting period between Chapter 7 bankruptcy filings from six years to eight years. The waiting period for Chapter 13 did not change, and is still two years. If your first bankruptcy was a Chapter 7 and you are considering filing a Chapter 13, the waiting period is four years. If your first bankruptcy was a Chapter 13 and you are now considering filing a Chapter 7 bankruptcy, the waiting period is six years.

The good news is you can file multiple bankruptcy claims. It's just a matter of when you can do so. These rules apply in every state because they are imposed on the federal level.

The date of your waiting period begins on the filing date of your first bankruptcy and ends on the date you file your second claim.

Bankruptcy Filing to Prevent Foreclosure

Even though your bankruptcy discharge may not be granted, if you wish to file to prevent foreclosure on your home, doing so is legal. You just won't be granted the discharge. Sometimes this is a good option for individuals who need to stop a foreclosure from going forward.

Getting Legal Help

While you can file bankruptcy without the assistance of legal counsel, doing so can leave you open to increased potential for litigation. Lawyers know how to effectively handle the legal process and will advocate for you and protect your rights. Hiring an attorney to handle your bankruptcy will help you get through the process more efficiently.