Most people see bankruptcy as a last resort. They have tried to make good on their debts, but they have fallen in over their heads, and they just can’t make it work. So they take advantage of this debt relief option to get a fresh start.
No one sets out to get into financial trouble, but bad things happen to even the best of us. All the financial planning and wise spending in the world can’t dig you out of some holes. So unfortunately, you may find yourself in the position of needing to file for bankruptcy a second time — or if you’re Donald Trump, multiple times.
Arizona law puts a limit on when you can file for bankruptcy after you have filed in the past. It is always best that you consult with an experienced bankruptcy lawyer to determine how the laws apply to your circumstances if you are ready to file for bankruptcy. However, here are some basic guidelines to let you know what you might be up against:
Chapter 7 after a Chapter 7
Chapter 7 bankruptcy is the type of bankruptcy that most people think of because it gives you the “clean slate” from credit cards and other unsecured debt. But you have to meet strict requirements to qualify for this chapter of bankruptcy. You will always have to wait the longest amount of time between filings if you want to file for Chapter 7 again.
You must wait eight years from the date you first filed for Chapter 7 bankruptcy in order to file again for the same kind of bankruptcy. That cuts down on the time a tad since you don’t have to wait eight years from when the first bankruptcy was finalized — and these matters can take several months.
Chapter 13 after a Chapter 7
If you need debt relief much faster after filing for Chapter 7 bankruptcy, you might consider looking at Chapter 13. The time to file is cut in half — just four years after the date you file for Chapter 7.
You won’t be able to discharge your unsecured debts, but you will be able to get your debts under control by entering into a negotiated repayment plan. Your bankruptcy lawyer will help you get a repayment plan that better reflects your current financial situation, which may include lower interest rates, lower monthly payments or lower overall repayment amount. After just three to five years, you will be free of your current debt.
Chapter 7 after a Chapter 13
In most cases, you will have six years from the date you filed for Chapter 13 bankruptcy in which to file Chapter 7. There are some exceptions.
You may be able to file for Chapter 7 bankruptcy sooner if you have already paid 100 percent of the unsecured debt or you have paid 70 percent of unsecured debts and you made your best efforts to do so. In other words, you may have been working diligently to pay off your debts under the proposed repayment plan, but you may have faced further hardship, such as losing your job or becoming ill. You may then be able to file for Chapter 7 to have your remaining unsecured debts discharged, plus any new unsecured debt you acquired in that time period.
Chapter 13 after a Chapter 13
The shortest waiting time to file for bankruptcy will be if you are looking at a Chapter 13 after you have already filed for Chapter 13. You will be able to re-file after only two years from the date of your initial filing. Since most repayment plans are for three to five years, chances are good that you will still be under a Chapter 13 restructuring when you are permitted to file again.
This is good news since it allows you to reevaluate your debt situation if your repayment plan is not providing the financial relief you need. Your Mesa bankruptcy lawyer may be able to incorporate the debts from the previous plan into a new plan with new debts that helps to lower your interest rates and overall costs.
As always, you will need to work with an experienced attorney who can help you understand your options before you make a decision. Mesa Bankruptcy Lawyers is ready to analyze your financial information and give you tailored advice about the best bankruptcy or debt relief option for you. Call us today if you are considering filing for bankruptcy, even if you have filed in the past.