When Can You Refile for Bankruptcy After the First?
- Filing for bankruptcy should not be confused with the bankruptcy proceedings themselves. When most people speak about filing for bankruptcy they mean going through with the bankruptcy; but filing is no guarantee of the process. The court can deny the petition for bankruptcy. Debtors can file again and again if they want to; but if the court believes there is not a good enough reason for a bankruptcy, then it will not grant it. Filing for bankruptcy after one has actually been completed carries a different set of standards.
- Because Chapter 7 bankruptcy is more complete, the court requires that debtors wait for a longer period of time than they would in a Chapter 13. If the debtor has already been through a Chapter 7, he must wait eight years before filing for Chapter 7 again. If he has been through a Chapter 13 bankruptcy, he must wait six years before filing for a Chapter 7.
- If debtors finished a Chapter 7 filing but now want to file for a Chapter 13 bankruptcy, they must wait four years before doing so. If a debtor wants to file for Chapter 13 bankruptcy twice in a row, the waiting period shrinks to two years. Debtors often have the ability to switch from one Chapter to another as long as the bankruptcy case is still ongoing, which can save time and hassle if another type of bankruptcy would work out better.
- Debtors should be very carefully when considering filing for a second bankruptcy. Bankruptcies drop credit scores and make it very difficult to qualify for additional loans. Most lenders require that debtors wait at least two years after filing before applying for mortgages, for instance. Having two bankruptcies on record may put all types of credit out of reach for up to seven years, when the bankruptcies are removed from credit records.
