In New Jersey, bankruptcy offers a powerful solution if you struggle with overwhelming debt. It can discharge certain debts and offer you a fresh start financially, although it cannot prevent new financial issues from cropping up. You can file for bankruptcy protection again as often as needed; however, specific timing and other restrictions apply.
The type of bankruptcy matters
The type of bankruptcy you initially file dictates the conditions upon which you can file a subsequent bankruptcy. People filing for personal bankruptcy protection usually file either Chapter 7 bankruptcy or Chapter 13 bankruptcy. Chapter 7 helps you discharge most types of debt within four to six months but may require you to liquidate the assets you do have so that you can repay creditors. Chapter 13 allows you to reorganize your debts and set up repayment plans to pay creditors off within three to five years and keep your assets.
Chapter 7 filings
If your previous bankruptcy was Chapter 7, you can file a new Chapter 7 once every eight years. If you had debts discharged under Chapter 7 and want to file Chapter 13 bankruptcy to set up payment plans, you must wait four years from your Chapter 7 filing date. However, in some cases, you can get the four-year waiting period waived if the judge does not discharge all of your debt through Chapter 7, which is informally known as a “Chapter 20” filing.
Chapter 13 filings
If you previously filed Chapter 13, you can file another Chapter 13 after waiting two years, although a Chapter 13 repayment lasts three to five years, so you would probably not file again this soon. You can file Chapter 7 after six years if your previous filing was Chapter 13. However, if you have repaid at least 70% of the debts you restructured under the Chapter 13 filing and have shown good faith in attempting to keep up with payments, a judge may decide to waive the six-year wait period and allow you to file Chapter 7.
Chapter 20
Although this bankruptcy type is a colloquialism rather than a part of the bankruptcy code, it represents a common approach known as double-filing. Individuals can file for Chapter 7 to discharge certain types of debts. After a waiting period of four years, the person can file Chapter 13 to restructure and set repayment schedules for debts that did not get discharged in the Chapter 7 filing. Although infrequent, a judge may waive the four-year wait time due to extreme financial events or if an individual did not receive any discharges in their Chapter 7 filing due to various circumstances.
Individuals may file bankruptcy as often as needed if they understand the waiting periods and other conditions that apply based on their previous bankruptcy filing type.