The timing rules don’t change if you filed bankruptcy before your divorce and now need a new one. But there ARE some important twists.
Divorce is often financially devastating. So, even if you and your ex-spouse filed bankruptcy earlier, before the divorce, you may need to seriously consider filing bankruptcy again at some point after the divorce.
There are some detailed but clear rules about when you can file a bankruptcy after going through one earlier. Today we’ll cover those rules briefly. Then we’ll finish with some special considerations that apply when there’s been an intervening divorce.
The Basic Rules Still Apply
To be clear, an intervening divorce does NOT directly affect the rules about when you can file a new bankruptcy case. If you and your ex-spouse filed a joint bankruptcy case in the past, for timing purposes that’s the same as if you would have filed by yourself. That’s true regardless if that bankruptcy was filed mostly because of the other spouse’s debts. It’s true even if you didn’t want to be involved, or if you felt you were barely involved. As long as you were on the bankruptcy documents and signed them, you filed bankruptcy.
The timing of a second bankruptcy case turns on two simple factors:
what kind of case—Chapter 7, 11, 12, or 13—you filed earlier, and
what kind of case you intend to file now.
Your marital status—before, during, after—has no effect.
The Timing Rules
If you now want to file a Chapter 7 “straight bankruptcy” case—
If the earlier case was a Chapter 7 or 11 one, you have to wait 8 years from the filing date of the earlier case to the filing date of the new case.
If the earlier case was a Chapter 13 one, you have to wait 6 years from the filing date of the earlier case to the filing date of the new case.
If you now, after the divorce, want to file a Chapter 13 “adjustment of debts” case–
If the earlier case was a Chapter 7, 11, or 12 one, you have to wait 4 years from the filing date of the earlier case to the filing date of the new case.
If the earlier case was a Chapter 13 one, you have to wait 2 years from the filing date of the earlier case to the filing date of the new case.
So, generally, you just look to see what Chapter case you filed earlier, and when that was filed. Then you know whether you need to wait 2, 4, 6, or 8 years to file the next case, depending on the Chapter of the new case.
But there are some other potentially game-changing considerations that in a practical sense especially apply to divorces
Special Post-Divorce Considerations
Think about the following three questions:
Did YOU actually file that earlier bankruptcy case? As mentioned above, you DID if you were on the bankruptcy petition and signed the documents that then got filed. But was the case actually filed? And when it was filed is there any possibility that only your ex-spouse was on the documents then? The above 2, 4, 6, and 8-year rules only apply to YOU if you were formally a debtor in that prior case. Not so if your ex-spouse filed that case without you. If that happened you can file a new bankruptcy case whenever you want.
Was a “discharge” of debts granted to the debtors in that earlier bankruptcy case? The timing rules only apply if that earlier case was actually completed successfully, resulting in a discharge of your debts. You might possibly think that the case was completed successfully and a discharge was entered, and yet be mistaken. This could happen if your ex-spouse was more involved in the case than you were. You may not have closely tracked how the case was completed. You may not have been in close contact with your bankruptcy lawyer. Of if you didn’t have a lawyer you may not have understood what happened. It is not unusual—especially in cases without a lawyer—for some relatively simple step to be missed and for the case to be “dismissed”—thrown out—without a discharge of debts. If that happened in your case, you can file your new bankruptcy whenever you want.
Do you definitely need a “discharge” in a new bankruptcy case? Sometimes you don’t. If not, you can file a Chapter 13 case without waiting ANY length of time you’re your prior case. You sometimes don’t need a discharge of debts so much as protection from creditors. Chapter 13 can often give you extended protection from certain important debts. For example, Chapter 13 deals well with secured and “priority” debts, such as your home mortgage(s), property and income taxes, child and spousal support obligations, home owner association dues, and student loans. You can get years of protection from these types of creditors. Usually that comes with the opportunity to pay these kinds of debts over time based on your ability to pay. You get this by filing a Chapter 13 case whenever you want, no matter when an earlier case was filed and completed.
In our next blog post we’ll expand on these three important post-divorce considerations.