Let's say that, four years ago, you were in a really bad spot financially. The amount of debt you were carrying was immense; and your ability to maintain payments was withering away. You had to do something -- so you filed for bankruptcy. Everything went well: your Chapter 7 bankruptcy went off without a hitch. Some of your assets were liquidated to pay off your creditors, and a bulk of your debt was discharged.
Over the last four years, you have been working towards getting back on track. There were some good times; and there were some bad times. But for the most part, you were on the ascendancy. Then, some event in your life triggered some more difficult times. You were plunged into debt yet again; and you find yourself seeking an attorney to repeat the bankruptcy process.
Seems reasonable enough, right? While there are certainly people out there who have dealt with this exact scenario, there's one aspect of it that could not happen -- the second Chapter 7 filing. You are not allowed to file for another Chapter 7 bankruptcy within eight years of your last one.
So what could a Seattle resident do if this hypothetical situation became their reality? Well, their first course of action should be to consult an experienced bankruptcy attorney. Every bankruptcy case is different, bringing unique details to the table. You will want a professional to help advise you and prepare you for the best course of action.
However, in general, a Chapter 13 bankruptcy could be used to help a recent Chpater 7 filer who, under ideal conditions, would file Chapter 7 again (but can't). The Chapter 13 repayment plan could reduce their monthly debt payments to minimal levels, allowing them to get a handle on their financial situation.
Source: FOX Business, "Too Soon to File for Bankruptcy Again?," Justin Harelik, Aug. 14, 2013