By Kitty J. Lin
Filing for bankruptcy protection will provide you with the opportunity to get out from under your debt and truly obtain a “fresh start” when all your unsecured debt is discharged. However, for some people, old habits die hard, or they are unable to get out from the lifestyle they are used to, and wind up back in front of the bankruptcy courts again. The Bankruptcy Code has rules on how long you have to wait before you can file another bankruptcy case again after your discharge. Otherwise, if people were free to incur debt and simply file a bankruptcy case whenever they wish for that debt to be discharged, our financial system would be thrown into chaos.
In a Chapter 7 bankruptcy case, all of your dischargeable unsecured debt (such as credit card debt, medical bills, personal loans, deficiencies from repossessions, etc.) will be discharged. Assuming there are no issues in your Chapter 7 bankruptcy case, the case is normally held open for approximately three to four months to provide your creditors with the opportunity to object to your bankruptcy case. If there are no objections, then your debts are discharged and your case is closed. In a Chapter 7 bankruptcy case, there is no repayment of your unsecured debts. Thus, since all of your unsecured debts were discharged, you will not be allowed to file for another Chapter 7 bankruptcy case until at least 8 years after your previous Chapter 7 bankruptcy case was filed.
In a Chapter 13 bankruptcy case, you will be repaying a certain percentage of your debt back to your creditors. After repaying your debts for three to five years, whatever unsecured debt left unpaid after the three to five years is discharged. Since you have been repaying some of the debt back to your creditors, the Bankruptcy Code is more lenient and allows you to file another bankruptcy case sooner. If you have previously filed a Chapter 13 bankruptcy case, the Bankruptcy Code allows you to file a Chapter 7 bankruptcy case 6 years later. If you have previously filed a Chapter 7 bankruptcy case, you can file a Chapter 13 bankruptcy case 4 years later. Finally, if you have previously filed a Chapter 13 bankruptcy case, you can file another Chapter 13 bankruptcy case 2 years later.
The easiest way to remember the rules is that there are 2-year differences between each rule:
1) 7 to 7 = 8 years
2) 13 to 7 = 6 years
3) 7 to 13 = 4 years
4) 13 to 13 = 2 years
If you need to file another bankruptcy case, it is best for you to seek the advise of an experienced bankruptcy attorney. You can visit us at Union City bankruptcy and Fremont Bankruptcy or call us toll free at 877-9NEW-LIFE or 877-963-9543 today to schedule a free consultation.