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Are you eligible for bankruptcy if you already went through one?

There are a number of reasons individuals get into debt. Medical issues and credit card debt are chief among these reasons, but Colorado residents may incur debt for a host of other reasons as well. In any event, no matter how the debt is accumulated, individuals should consider filing for bankruptcy if the debt becomes too high to bear.

Take, for example, the case of a conservative activist who recently filed for Chapter 7 bankruptcy, despite only having a debt of $6,900 for a car loan that he was not trying to get discharged in the personal bankruptcy. The main reason the man filed for bankruptcy was because of $21 million in potential judgments he may have against him in a legal battle that he was trying to get discharged.

The man had previously filed for bankruptcy in 1987 after a business failed. Typically, a person's past bankruptcy may be an issue in determining whether they are eligible for a current bankruptcy.

If a person previously had debt discharged in a Chapter 7 bankruptcy, the person is ineligible for Chapter 7, but only if the discharge occurred within the past eight years. Similarly, a previous discharge under Chapter 13 can bar a bankruptcy filing, but only if it occurred in the last six years.

A person may also be ineligible if he or she had a previous bankruptcy dismissed in the past 180 days for violating a court order, fraudulent conduct on the court or if the debtor requested a dismissal in conjunction with a creditor's request to a lift a stay. Accordingly, while past bankruptcy activity plays a part in determining a person's eligibility for a current bankruptcy, the past activity only applies in certain circumstances. Otherwise, a person is free to file for bankruptcy to obtain debt relief, just as any other person.

Source: Oregon Live, "Bill Sizemore files for bankruptcy in attempt to head off union lawsuits," Jeff Mapes, April 12, 2013

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