- If you filed for chapter 7, or liquidation bankruptcy, you did so because the courts found that you met the "means test," which means that your income was less than the median income in your state. Most or all of your unsecured debt should have been eliminated during your chapter 7 bankruptcy discharge, and you must wait six years before filing for chapter 7 a second time.
- Those who filed for chapter 13 bankruptcy will find that refiling is not as cut-and-dried as with chapter 7. Because debts are reorganized in chapter 13, rather than eliminated as in chapter 7, the time of the actual bankruptcy discharge takes years rather than months. Chapter 13 requires that you repay creditors at least some, if not all of your debt, and typically takes three to five years to complete. The first bankruptcy must be completed before another bankruptcy can be filed; however, you can refile six months after the initial chapter 13 bankruptcy is discharged.
- The term "chapter 20" is bankruptcy slang for filing a chapter 7 or chapter 13 bankruptcy, then filing the opposite bankruptcy as soon as the first is discharged, for a chapter 20 total. Bankrate.com explains that, "individuals get into debt again within six years of a chapter 7 and end up filing a chapter 13," or that individuals will file chapter 7 after filing chapter 13 if the reaffirmed debt is too difficult to repay.
- The problem with bankruptcy is that it destroys your credit. Chapter 7 bankruptcy will haunt your credit for 10 years, while chapter 13 will stick with you for seven years. While it's possible to begin rebuilding your credit soon after a bankruptcy discharge, refiling again will undo any work you've done to restore your good name, making it more difficult to get credit, buy a car or mortgage a home.
Chapter 7
Chapter 13
"Chapter 20"
Serial Bankruptcy's Problems
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