The 4 Things to Consider if You Are Thinking of Filing For A Second Bankruptcy
Bankruptcy is usually the final option for people dealing with serious financial difficulties.
The process can provide much-needed relief from the heavy burden of carrying mountains of debt, and while it takes some time to recover, it is generally viewed as a worthwhile experience from most people that have gone through it.
However, there are some instances where financial crisis rears its ugly head again, causing some to have to file for a second bankruptcy. This is an option available to anyone that has undergone bankruptcy, but it is important to know what to expect from the process when doing it a second time over.
1. Discharging is different
The main need to declare bankruptcy is an inability to pay off debts. By doing so, you can have certain debts discharged, meaning the remainder of the debt is canceled providing they meet all requirements set forth by the court.
During a second bankruptcy, the discharging process is different, so you need to be aware of this. Basically, you need to wait a set period before you can have a second discharge from the courts, relating to the time when you first filed for bankruptcy.
This can range from two to eight years depending on when you filed and the type of bankruptcy (e.g. chapter 7 or 13).
2. It could be longer and more expensive
A second bankruptcy is a longer process than your first, so be aware this could make it more expensive and last much longer compared to the first time around. For instance, when you have no surplus you can expect a discharge to last 24 months, providing you’ve met the required duration between the first and second filing.
Those with surplus filing for a second time will receive an automatic discharge, but only after 36 months have passed. This means the cost of repaying debts will be higher than the first time, even if getting a discharge.
3. You shouldn’t be penalized for filing again
Many assume they will face harsh penalties for declaring a second bankruptcy, but this is not the case. Circumstances are reviewed in the same manner and you shouldn’t be punished with a different length of bankruptcy due to it being your second time.
4. You can’t be forced with debt payments if you can’t afford them
The same payment process remains regardless of how many times you’ve gone bankrupt – you can only pay debts you can afford. This means reviewing your disposable income again and determine how much – if any – you can afford to pay towards your debts.
It’s no different to being reviewed the first time over, where your income and expenditures are reviewed to determine repayment options. Those with a surplus to their income must pay towards debt for three years.
Again, you can’t be forced to pay debts you cannot afford to just because it’s your second bankruptcy.
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 (951) 274-9501 or (951) 274-9501.