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Can I file for Chapter 7 bankruptcy again after a past discharge?

On Behalf of | Dec 20, 2022 | Bankruptcy

Financial challenges are nothing new to Californians and people across the nation. A failed business venture, job loss, making mistakes with credit cards, a medical emergency and other problems can arise and lead to a person facing overwhelming bills.

When falling behind on payments, it will result in endless calls from creditors, stress and fear about the future. For many, a personal bankruptcy filing—Chapter 7 or Chapter 13—is a viable solution.

This is effective and can clear unsecured debt while allowing the retention of certain properties. Despite that, some run into financial obstacles, even after a successful bankruptcy discharge. It is important to know about getting a second discharge and how to go about it.

Is it possible to get a second discharge after a prior bankruptcy?

People who need to file for Chapter 7 bankruptcy after a previous discharge can do so. There are limits that should be known before considering it. When seeking a second discharge, the court will deny it in a new Chapter 7 case if there had been a Chapter 7 or Chapter 11 discharge within eight years of the new petition.

The limit is six years if the prior filing was under Chapter 12 or Chapter 13. The Chapter 7 discharge in this context will be allowed if the debtor paid all the unsecured claims that were allowed in the prior case or the payments under the plan reached 70% of the allowed unsecured debt and the proposal had been made in good faith with the best efforts to make the payments.

In other words, the court will assess the debtor’s intentions when the payments were made and determine if they tried to pay back the unsecured debt. Regarding Chapter 13, the debtor cannot get a discharge within four years of a previous Chapter 7, Chapter 11 or Chapter 12. With Chapter 13, it cannot be done if it was within two years.

We can help with bankruptcy whether it is a first or second case

When confronted with financial problems, people need to know where to turn. Our office can help with all aspects of personal bankruptcy whether it is a Chapter 7 liquidation or a Chapter 13 repayment plan.

Since the issues that resulted in a first bankruptcy could happen again, it is essential to have a plan. Calling for guidance and advice with a bankruptcy—whether it is a first-time case or a subsequent filing—is vital and we can provide that critical help to reach a positive result to get back into a good financial situation.