Exploring Social Security Cases and Outcomes

Can You File For Bankruptcy Multiple Times?

by Marie Caldwell

When you file for bankruptcy, it's supposed to give you a fresh start so that you can avoid future financial trouble. Unfortunately, you can still find yourself in a situation where you need to file for bankruptcy again. It is possible to file for bankruptcy for a second time or even more than that, but it gets much harder each time.

Mandatory Waiting Periods

The first thing to consider is that there are mandatory waiting periods between bankruptcies that measure in years. Exactly how long depends on the type of the original bankruptcy, the type of bankruptcy you're now considering, and possibly the type of debt you want to be discharged. There is no waiving of the waiting periods. You can't file for bankruptcy until you've waited the required time.

Will Bankruptcy Help?

An important question to ask when considering bankruptcy at all is whether bankruptcy will help you or not. The point of bankruptcy is to reduce overwhelming debts so that you can get your finances under control and not add additional debt. In order for bankruptcy to work, you need a plan to increase your income or reduce your expenses so you don't need to file for bankruptcy again.

With a second bankruptcy, this question becomes even more important. In some situations, you may have just been unlucky. This could be due to specific circumstances, like two major illnesses leading to medical bankruptcies. In other situations, you need a real answer for what will be different this time.

Did You Complete Your Prior Bankruptcy?

In order to be eligible for bankruptcy again, you need to complete your first bankruptcy, including paying off any payment plans. If you engaged in any misconduct, such as not following the court order or hiding assets, the judge has a discretionary right to bar you from filing for bankruptcy again. If you were denied a discharge of your prior debts, you may not be able to include them in a future bankruptcy even if you are eligible.

Why Are You in Debt?

Judges will look more closely at multiple bankruptcies to prevent fraud. For example, if you made expensive purchases or took luxury vacations, they may decide that you never intended to pay off your debts. In order to be eligible for bankruptcy again, you need to show that all of your financial decisions were made in good faith.

To learn more about what you should do if you need to file for bankruptcy again, contact a local bankruptcy lawyer today.