Filing for Bankruptcy a Second Time

second timeFiling for Bankruptcy a Second Time

No one expects to have to file for bankruptcy, and most people who do don’t intend to ever have to do it again. But it’s not unusual for someone who has filed bankruptcy once to find themselves doing so again in the future. If you are considering filing a second bankruptcy in NYC, there are some things you’ll need to know.

Wait the Minimum Time Between Discharges

Most people who have been through a bankruptcy before understand that they need to wait a specific time limit before they file again. However, the law doesn’t actually state that you have to wait between filings; only that you cannot receive a second discharge within so many years from your first. This makes filing a second bankruptcy useless if you don’t wait the specific time.

The time limits are different depending on the type of bankruptcy chapter you filed, and what type you’d be filing for your second bankruptcy. For example:

• If your first discharge was from a Chapter 13 bankruptcy in NYC, you cannot receive a second Chapter 13 discharge within two years from the original filing date of the first.

• If your first discharge was from a Chapter 7 bankruptcy in NYC, you cannot receive a second Chapter 7 discharge within eight years from the original filing date of the first.

Filing Under Different Chapters

The time limits for a second bankruptcy change if you are filing under a different chapter. For example, while you can receive a second discharge on consecutive Chapter 13 bankruptcies after just two years, you’d have to wait six years between an original Chapter 13 and a subsequent Chapter 7. If you’ve paid at least 70% of the claims in the Chapter 13, this six-year waiting period may be excused.

In order to file a Chapter 13 after an original Chapter 7, you will have to wait four years from the original filing date. This can cause one hang up: if you are filing four years after a Chapter 7, and the court determines that your new Chapter 13 must be converted to a Chapter 7, you’d have to wait an extra four years to meet the law regarding consecutive Chapter 7 filings.

No Original Discharge? No Problem

In some cases, you may not have gotten a discharge from your first bankruptcy. For example, if the case was dismissed or the discharge denied, you can file again as soon as you want. The only exception may be a brief waiting period if the dismissal was due to failure to obey an order from the court (such as a failure to appear). These waiting periods are usually no longer than 180 days.

Chapter 20 Bankruptcy in NYC

There is a specific type of bankruptcy which ignores the conventional filing rules, called a Chapter 20. This is when a person files a Chapter 7, and then immediately files a Chapter 13. Again, there’s no law against this – they just cannot get the discharge from the second filing. A person may do this if they want to arrange specific type of payment for tax debt. This is a complex legal choice that should not be made lightly, due to the forfeiture of the discharge. Be sure to seek the counsel of a bankruptcy lawyer in NYC before attempting a Chapter 20.

Second Filings Carry the Same Consequences and Benefits

If you choose to wait the minimum filing time in order to receive a second discharge, it’s important to know that second filings work just like a first. You’ll face the same potential consequences, such as a hit to your credit, but also the same benefits of the specific bankruptcy chapter you file. There’s no difference between a first and second bankruptcy, and since you already know what to expect, you’ll be better prepared.

After your first bankruptcy, you already know that filing for bankruptcy in NYC can be complicated and time consuming, even if you are prepared. A qualified legal expert can help you get the best possible outcome, and will ensure that you are filing within the right timeline for the outcome you want. If you are considering a second bankruptcy, contact my office at 212-244-2882.