Frequently on this blog, I’ve referred to bankruptcy as a fresh start, a beacon of hope, and a way to get your life back on track. Throughout the years I’ve seen countless clients take the benefits that bankruptcy offers and run with them, turning a new page in their financial lives. But we live in the real world, where that sort of happy ending isn’t always the case for Iowa residents. Factors within and outside of your control can lead you back down the path toward debt and financial woes that you thought you were escaping. While bankruptcy is frequently the best option for families and individuals with debts they can’t pay, it cannot protect you from poor decisions you make in the future.
If you’ve recently filed bankruptcy in Iowa, take this message as a word of warning. Bankruptcy has given you another chance, and it’s up to you to take advantage of it. But if you’ve arrived at this blog post, it is likely that you already find yourself amid the same financial problems that forced you to file for bankruptcy in the first place. Luckily, you can file for bankruptcy again – it is not restricted to a one-time process. Having said that, bankruptcy is not meant to be continually used every time an individual finds themselves in financial hardship. Ideally, a bankruptcy rids you of debts that have piled up over a long period of time and points you in the direction toward financial independence.
As I said, federal and Iowa laws do allow you to file for bankruptcy a second time, but carry some pretty heavy restrictions as well. It all depends on which type of bankruptcy you originally filed – Chapter 7 or Chapter 13 – and which chapter you intend to file this time.
If you first filed a Chapter 7, you must wait eight years until you can file for Chapter 7 bankruptcy again in Iowa. This timeline is strict – you will not be able to discharge your debts before eight years have passed. If you want to file a Chapter 13 bankruptcy after filing a Chapter 7 bankruptcy, you must wait four years. There may be some advantages of filing for Chapter 13 before four years, however. Call Marks Law Firm today to discuss how a Chapter 13 helps even if you can’t discharge your debts entirely, and how it could apply to your situation.
If you first filed a Chapter 13, a Chapter 7 bankruptcy can only be filed six years after the Chapter 13, OR if 70 percent of your debt to unsecured creditors has been paid. Finally, consecutive Chapter 13 bankruptcies must be at least two years apart in order to discharge debts a second time. I realize that I’ve crammed a lot of specific details and laws into this post. If you have questions about any of the information I’ve discussed here and how it applies to your personal situation, please don’t hesitate to call our office today and schedule a free consultation.