If I filed a Chapter 7 in the past but have new unsecured debt, or fell behind on my mortgage, when can I file another bankruptcy?
You can file another Chapter 7 to wipe out new unsecured debt every 8 years from the filing date of your previous Chapter 7. Wiping out debt depends on your income and equity in your home [if you have a home].
If it has been less than 8 years but more than 4 years since the filing date of your previous Chapter 7, you can file a Chapter 13. A Chapter 13 is where you will pay a percentage of your debt back. You pay a trustee who is court appointed. You would pay the trustee who in turn pays the creditors the percentage outlined in your Chapter 13 plan. This plan lasts for 3 to 5 years. The percentage to be paid back to your creditors can range from a few cents on a dollar to a larger amount, depending on your income and the amount of equity in your home [if you have a home]. It must be 4 years after the filing date of your previous Chapter 7 in order to be in such a plan.
If you need to file earlier than the 4 years from the filing date of your previous Chapter 7, then you must pay 100% of your debt back in the Chapter 13 plan. You would not be paying any interest on that debt so that usually makes it possible to pay off the debt. It is called a nondischargeable Chapter 13. You will get a discharge, but because you can’t wipe out the unsecured debt, it is referred to as a nondischargable Chapter 13.
If you need to simply catch up on your mortgage, you can file a Chapter 13 with no time limit as to when you filed your previous Chapter 7. And that Chapter 13 will allow you to catch up on your mortgage arrears. If the Chapter 13 is less than 4 years after your previous Chapter 7 was filed, the Chapter 13 in this case would not allow you to wipe out any unsecured debts you may have accumulated. Again, the unsecured debt would have to be put in your plan at 100%.
In a mortgage arrears case, if it has been more than 4 years after the filing date of your previous Chapter 7, then you may be able to wipe out all unsecured debt while paying off the mortgage arrears through the Chapter 13 plan. Again wiping out your unsecured debt depends on your income and equity in your home [if you have a home]. You would still be able to pay off the mortgage arrears through this Chapter 13 plan.