Can I File for Bankruptcy Again? 

Filing for Bankruptcy Again

Many people who come to my Cleveland office want to know if it’s possible to file for bankruptcy again. The unfortunate truth is that while bankruptcy is the end of many people’s financial problems, there is a 1 in 3 chance that if you file bankruptcy once in your life, you will end up filing bankruptcy yet again at some point in the next 20 years.  

Perhaps as a Cleveland bankruptcy attorney, it is just because I am biased but I am not surprised when people have to declare bankruptcy more than once. However, I view it as a necessary consequence of our modern financial system in which credit is extended to people we don’t know based on information we haven’t verified.

Furthermore, all of this is occurring in a very unstable environment where at any point not only your job but your whole function in life could suddenly be outsourced or rendered obsolete by a machine or computer program that costs only a few hundred dollars to purchase.

Pros and Cons of Filing for Bankruptcy Again

If you do get into financial trouble more than once there is some good news and some bad news. The good news is that you can indeed declare bankruptcy more than once; the bad news is that there are some common-sense limits on this that will prevent you from using bankruptcy as an easy way out whenever you run into financial difficulty. 

Here are the basic rules:

• If you declare Chapter 7 bankruptcy, which is the type of bankruptcy that 95% of people end up filing, you cannot file Chapter 7 bankruptcy again for 8 full years. 
  • The only exception is if your original Chapter 7 bankruptcy filing was unsuccessful, in which case you can file another Chapter 7 almost immediately, assuming you did not abuse the bankruptcy process and otherwise qualify for a Chapter 7 bankruptcy.

Chapter 13 Bankruptcy as an Option

The other type of individual bankruptcy is a Chapter 13 bankruptcy. The sad truth is over 50% of Chapter 13 bankruptcies eventually fail and are dismissed, in which case you can file another bankruptcy immediately assuming, again, that you have not been abusing the bankruptcy system and otherwise meet the necessary qualifications. You can file another Chapter 13 or a Chapter 7 if that is what makes sense.  

On the other hand, if you are part of the chosen few Chapter 13 bankruptcy filers who actually complete their 3- to 5-year payment plan and obtain elimination of their debt then your options are more limited:  Although you can file another Chapter 13 bankruptcy immediately if that is necessary, you usually cannot file a Chapter 7 bankruptcy until 6 years have passed from the date where you filed your original Chapter 13.

Looking to File Bankruptcy Again?

If you have filed a previous bankruptcy in the past 8 years and think you may need bankruptcy again, don’t try to figure out the rules on your own. Call an experienced Cleveland bankruptcy lawyer at 216-526-0309 and I will help you figure out your options at no initial cost to you.

Or, if you want to shoot me a question, feel free to do so. I’m more than happy to help.