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Does a previous bankruptcy affect eligibility to file again?

Every Colorado resident has done certain things in their past that they would rather forget. Whether it be a personal or a professional incident, individuals often learn from their mistakes and move on from the event toward a better life.

In the eyes of the law, however, a person's past events can play a significant role in terms of how the person is treated in court. For instance, when it comes to bankruptcy law, the person's history of filing for bankruptcy can impact whether they are able to file for bankruptcy after recent financial struggles.

Typically, a person is ineligible for a Chapter 7 case if he or she has had debt discharged under Chapter 7 or Chapter 11 within 8 years of filing for bankruptcy. A Chapter 7 case is further unavailable if the person received a discharge under a bankruptcy case filed under Chapter 12 or Chapter 13 within 6 years. In other words, if the person received a discharge of their debt 5 years ago, that discharge can bar the person from receiving a second debt discharge.

There are exceptions that apply for previous debt discharges under Chapter 12 or Chapter 13, however, such as if the person paid the allowed unsecured claims in the case. Likewise, if the person had a payment plan and made payments of at least 70 percent of allowed unsecured claims, a second bankruptcy under Chapter 7 may be available.Like Chapter 7, there are provisions that bar a person from receiving a discharge under Chapter 13 if the person has received a prior discharge under Chapters 7, 11, or 12 within 4 years. If the person received a discharge in a previous Chapter 13 case, the person may be barred from seeking a second discharge under Chapter 13 within two years.

Ultimately, each person's history will be different. Accordingly, it is essential that the person understand what provisions may apply if they have previously filed for bankruptcy and want to file a second petition.

Source: United States Courts, "Discharge in Bankruptcy," accessed Oct. 30, 2014

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