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What Is the Waiting Period to File for Bankruptcy a Second Time?It is the season for spring cleaning, and many people who are sheltering in place now may have the time to go through piles of old documents. Perhaps some of those documents are related to a bankruptcy case that you filed in the past. This may make you wonder: Could you file for bankruptcy again if you needed to? As shown by the massive layoffs because of the pandemic, circumstances that are beyond your control can cause financial stress that limits your ability to repay your debts. Bankruptcy can work just as effectively for you as it did before, but there is a minimum waiting period before you can receive bankruptcy discharge again.

What Does the Waiting Period Mean?

There is no time limit to file for bankruptcy again, but you have to wait a few years before you can discharge your debt again. Most individuals choose between filing for Chapter 7 or Chapter 13 bankruptcy.  

Discharge is one of the most powerful bankruptcy tools because it allows you to clear your unsecured debt without having to repay all of it. You ideally want to have that tool available if you need to file for bankruptcy a second time. However, it may make sense to file a Chapter 13 bankruptcy without intending to discharge your debts if you need help repaying secured creditors or non-dischargeable taxes after a Chapter 7 case. While you may not be required to repay the secured debt, it may be necessary if you want to keep the secured property.

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How Bankruptcy Can Cure You of Medical DebtMedical bills are one of the top sources of unpaid debts in the U.S. According to a recent academic study, two-thirds of the people who file for bankruptcy cite medical issues as one of the key factors that led to their decision. Expensive medical treatment can have a compound financial effect on patients:

  • Patients may lack adequate health insurance coverage or savings to pay for an unexpected health problem.
  • The patient may lose income if the injury causes a temporary or permanent disability that prevents them from returning to work.

If your healthcare debt becomes overwhelming, bankruptcy allows you to discharge your unpaid medical bills or repay them perhaps at a reduced cost.

When to Consider Bankruptcy

If you have good credit and little debt other than your medical bills, you should explore repayment alternatives before choosing bankruptcy. You may qualify for an assistance program that will reduce what you owe. However, some hospitals do not offer assistance programs, while others may have strict income limits to qualify. You also must consider your ability to repay other debts, such as credit cards and a home mortgage. Bankruptcy is a means of managing all of your creditors at once and can be an excellent strategy to help get you back on track

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Making Sure to Include All Creditors in a Bankruptcy FilingFailing to list all of your creditors during your bankruptcy case might mean that you cannot discharge the debt, especially if you intentionally omit a creditor. If the case is ongoing, you can amend your bankruptcy Schedules to include an additional creditor. However, fixing your mistake is trickier if you have already completed your bankruptcy and your debts have been discharged. You may be responsible for the debt to your missing creditor.

Chapter 7 and No-Asset Cases

If you discover a missing creditor after a Chapter 7 bankruptcy case, your liability may depend on whether you had a no-asset case. In a no-asset bankruptcy, the trustee does not liquidate any assets because they are all exempt, and your debts are still discharged. So, a bankruptcy court may rule that the debt from an omitted creditor in a no-asset case is already discharged because the creditor would not have received money from the bankruptcy. Most Chapter 7 cases in Texas are no-asset cases. However, this ruling does not apply if the creditor has a debt that is considered non-dischargeable, such as child support, alimony or certain taxes. 

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National Association of Consumer Bancruptcy Attorneys State Bar of Texas
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