Rules for Filing a Second Bankruptcy

By Timothy Mucciante

Depending on the type of second bankruptcy you want to file, there may not be a waiting period or a waiting period of up to eight years. A second bankruptcy may also be filed after a dismissal of the first one. A dismissal is different from a discharge. A discharge releases you from any liability to your creditors, while a dismissal is when the court throws out your case before it is completed. Usually, a dismissal arises from a failure to file necessary documents or failing to make payments under a Chapter 13 repayment plan.

Chapter 7 Vs. Chapter 13

Both Chapter 7 and Chapter 13 bankruptcy proceedings are used by consumers to resolve their financial problems. Both types of bankruptcies stop foreclosures, repossession and creditors from collecting debts from you, due to the automatic stay issued when the bankruptcy is filed. In addition, both bankruptcies may result in a discharge of your debts. In a Chapter 7 bankruptcy, you receive a discharge after the trustee sells your assets and uses the money to pay your creditors. A Chapter 13 bankruptcy allows you to enter into a repayment plan with your creditors that lasts for a three to five year period.

Filing a Second Chapter 7 Bankruptcy

You must wait eight years from the filing date of your first Chapter 7 bankruptcy to file another. This time lag is partially due to the government's effort to reduce bankruptcy abuse. Before the 2005 bankruptcy reform, a debtor only had to wait six years before filing for a second Chapter 7 bankruptcy. However, if you are filing a Chapter 7 bankruptcy after a Chapter 13 dismissal, you may do so immediately, unless the court has entered an order prohibiting you from doing so.

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Filing a Second Chapter 13 Bankruptcy

A second Chapter 13 bankruptcy may be filed any time after a prior Chapter 13 bankruptcy discharge; however, you will not be eligible for a discharge under the second bankruptcy until two years have passed since filing the previous Chapter 13 bankruptcy. You may also file a second Chapter 13 bankruptcy immediately after your first Chapter 13 bankruptcy was dismissed, but an automatic stay (protection from your creditors) may be limited to 30 days or not granted at all. In contrast, you may not receive a Chapter 13 discharge until four years have passed since filing for a Chapter 7 bankruptcy.

Filing a Chapter 7 Bankruptcy After a Chapter 13 Bankruptcy

To file a Chapter 7 bankruptcy after a Chapter 13 discharge, you must wait six years from the filing date of the prior Chapter 13 bankruptcy. However, there is no waiting period if you're filing a second Chapter 7 bankruptcy after a Chapter 13 discharge if all of your Chapter 13 creditors were paid, or if 70 percent of your creditors were paid using your best efforts. As previously mentioned, if you are filing a Chapter 7 bankruptcy after a prior Chapter 7 discharge, eight years must have passed from the filing date of the previous Chapter 7 bankruptcy before you can do so.

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How Long Is an Automatic Stay After a Chapter 13 Dismissal?

References

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