Nobody wants to file for bankruptcy but sometimes there are no alternatives. While it’s understandably difficult, the process of filing for bankruptcy often brings welcome relief from the constant concerns of being swamped with debt you cannot repay.
Recovering from bankruptcy is a long, challenging process but most people come out the other side glad that they did it. In most cases, you learn a great deal about yourself and financial responsibility from declaring bankruptcy.
However, there are times when people feel they need to file for a second bankruptcy. Given the financial difficulties of going through one bankruptcy, it is understandable why many people feel they haven’t fully recovered and need to file for a second time.
Before filing for a second bankruptcy it’s important to consider these 5 important factors:
The Discharge Process is Different
Bankruptcy typically occurs from an inability to pay off debt. During the bankruptcy process, certain debts are discharged, which means your debts are cancelled should you follow the specific requirements of the court ruling.
When filing for a second bankruptcy the discharging process is not the same. This is because a longer period must pass before you can apply for a second discharge, which is determined by the circumstances of the initial filing.
So, the type of bankruptcy filed (e.g. chapter 7 or chapter 13) and the date of your filing impact how long it takes before you can have debts discharged. The period lasts anywhere between two and eight years depending on these factors.
Expect it to Last Longer
When filing for a second bankruptcy expect the entire process to last longer than the first.
For example, anyone with a surplus to their income that files for a second time receives an automatic discharge of debt, although they need to wait for a minimum of 36 months. Similarly, anyone filing without a surplus will wait for 24 months for a discharge of debt.
This doesn’t include the time you must wait between filing your first and second bankruptcy, so there could be an additional 2-8 years of waiting depending on the condition of the first filing.
Given the longer duration of filing for a second bankruptcy, it may be worth considering different options in the meantime, as you may have no other options.
It Might Cost More
Because the second bankruptcy always lasts longer expect it to cost more. The repayment costs will be higher and cover a longer period, meaning the entire cost of the bankruptcy will be higher than the first time.
Don’t make the mistake of thinking the entire process is the same for a second time, otherwise you’ll end up paying more than you expect.
There are no Penalties for a Second Bankruptcy
A lot of people think that filing for a second bankruptcy comes with additional penalties but this is not true. All the conditions of the bankruptcy are based entirely on the same review process, meaning the courts cannot punish solely for declaring a second bankruptcy.
Yes, the discharge process may take longer and be more expensive, but the overall bankruptcy process isn’t made longer simply because it’s your second time.
Payment Process is the Same
You can’t be forced to pay debts you can’t afford just like your first bankruptcy. In fact, the payment process is pretty much the same, although you often pay more because the debt discharge lasts longer than last time.
How much you pay is determined in the exact same way as the first filing. It’s based entirely on your disposable income, expenditures, and the amount you can afford to pay from your debt. If there is a surplus income the payment process lasts three years.
The Travis Law Firm provides professional legal representation for Chapter 7 & Chapter 13 bankruptcy services for residents of all cities in Riverside and San Bernardino Counties. We have offices in Riverside, San Bernardino, Victorville, Temecula, Cathedral City and Ontario for the convenience of our Inland Empire, High Desert, and Coachella Valley clients. For more information about our bankruptcy law services and other legal representation, call us today at 1-800-BANKRUPT or (951) 274-9501.