In a recent video by Kain + Henehan, Margaret Henehan explains the specific timelines and conditions related to Chapter 7 and Chapter 13 bankruptcy filings. Here are her insights, along with some practical guidance for those facing repeated financial hardships.
Transcript:
Yeah, so no one, obviously, sets out to file bankruptcy more than once, but lots of circumstances can lead someone to having to do a second bankruptcy. In a Chapter 7, you can do a bankruptcy every eight years if you did a Chapter 7. There is a timeframe when you do have to wait it out. The other type of bankruptcy is a Chapter 13 and that’s a payment plan bankruptcy. For that, you can file more frequently because you are paying your creditors back something, but for a Chapter 7, you do have to wait it out eight years post filing.
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Bankruptcy Isn’t Usually the Plan
To start, it’s important to acknowledge that nobody sets out to file for bankruptcy more than once. Life circumstances such as medical emergencies, job loss, or other unexpected events can sometimes force individuals into repeated financial distress. While it isn’t common to plan for multiple bankruptcies, understanding the rules around it can offer some much-needed clarity and peace of mind.
Understanding Chapter 7 Bankruptcy
Margaret Henehan elaborates that under Chapter 7 bankruptcy, you can file only once every eight years. This waiting period ensures that individuals don’t repeatedly eliminate their debts without any repercussions. Chapter 7 is typically the most extreme form of bankruptcy and involves liquidating your assets to pay back creditors.
Understanding Chapter 13 Bankruptcy
Chapter 13, on the other hand, is somewhat more lenient because it involves a payment plan to repay your creditors over a while. Due to its structure, where creditors receive at least some portion of their owed amounts, the rules permit you to file for Chapter 13 more frequently than Chapter 7. Chapter 13 can be a viable option for those who earn a steady income but are overwhelmed by their debt obligations.
The Importance of Timing
Timing is critical in bankruptcy filings. Filing too soon can result in your case being dismissed, which only prolongs the financial strain you’re trying to alleviate. It’s essential to consult an attorney who can guide you through the exact timelines and help ensure that you’re filing your case in a manner that’s both beneficial and legally sound.
Learn More About Bankruptcy From Kain + Henehan
The complexities of bankruptcy law make it crucial to seek advice from experienced professionals. Contact Kain + Henehan at (612) 438-8006 or complete the online form. We can walk you through your options, helping you choose the best path forward according to your circumstances.
