What If I Get Into Debt Again After Bankruptcy?

debt after bankruptcyWe know that finances are one of the biggest stressors in people’s lives. We also know that when many people hear the term bankruptcy, they think that someone failed in their personal or business lives. That is not always the case. There are many reasons that people find the need to file for bankruptcy and not all of them are due to out of control spending. Please seek legal assistance from an Arizona bankruptcy attorney if you are considering filing for bankruptcy so you can understand all of your options.

However, today we want to talk about what your options are if you find yourself in uncontrollable debt again soon after filing for bankruptcy. There are a few things you need to be aware of.

What Happened?

Okay, first the cold hard facts – if you have already filed for bankruptcy and get into debt again shortly after, you will not be able to file again. While there is no limit to the number of times you can file for bankruptcy, there are limits set by law regarding how often you can file and those limits depend on which type of bankruptcy you filed in the first place and which one you want to file for now.

  • Chapter 7 to Chapter 7: If you received a discharge in Chapter 7, you will have to wait eight years from the time you filed before you can file for Chapter 7 again.
  • Chapter 13 to Chapter 13: If you received a discharge in Chapter 13, you will not receive another discharge from Chapter 13 unless it has been two years from the time you filed for a previous Chapter 13. This is usually not a problem because Chapter 13 bankruptcies are designed to have debts discharged under a 3- to 5-year repayment plan.
  • Chapter 7 to Chapter 13: If you received a discharge under Chapter 7 you can file for a Chapter 13 and be eligible for discharge only if the new case has been filed at least four years after the first filing. You may hear filing for Chapter 13 AFTER filing for Chapter 7 called a Chapter 20 bankruptcy.
  • Chapter 13 to Chapter 7: If you previously received a discharge under Chapter 13 then you have to wait at least six years from the date that was filed to be able to file for Chapter 7 bankruptcy. However, if you have completed payment plans and paid back all of your unsecured debts in Chapter 13, you do not have to wait six years.

Tackling The Underlying Issues

While we realize that there are many outside factors that contribute to a person going into bankruptcy, you need to carefully examine why you are in debt again so soon after filing in the first place. Bankruptcy is a legal method that allows people to recover and get back on their feet when they are in financial trouble and most people learn from previous mistakes and conduct the financial lives more prudently when they get a second chance.

Please keep all of this in mind when you are going through the bankruptcy process and have received a discharge from your debts.

Moving Forward From Here

First, if you have not yet filed for bankruptcy but are considering it, please seek legal assistance. These cases are very difficult to handle on your own and an Arizona bankruptcy attorney can walk you through all of your options. First, an attorney can analyze your entire financial situation to determine whether or not you need to file and which type to file for. Then, you need to be advised about how bankruptcy can affect you, both the positives and negatives.

Click here for information on Arizona wage garnishment laws.