Bankruptcy is a legal process that is designed to help both consumers and businesses eliminate their debt or repay the debt under the protection of bankruptcy court. Presently there are no limits to the number of times you can file for bankruptcy. Bankruptcy law determines the length of time between filing for bankruptcy and multiple filings may result in debt that is not discharged if it appears you are abusing bankruptcy laws.

Understanding the different forms of bankruptcy.

Chapter 7 bankruptcy is also referred to as liquidation bankruptcy. In this process property that is not “exempt” under state or federal laws may be sold with the proceeds of the sale going toward repayment of your debts. Your disposable income plays a role in determining if you are eligible for chapter 7 bankruptcy and not all debts can be erased in the process. Under the bankruptcy law you have to wait 8 years from the date of your previously filed bankruptcy before you would be eligible for a discharge in a new Chapter 7 and four years from your previous filing to be eligible for a Chapter 13 case.

Chapter 13 bankruptcy is an option available to people who can prove they have a reliable source of income in which to repay their debt. If you qualify you would be required to provide a repayment plan that explains how you intend to pay off your debts within 3-5 years. Bankruptcy laws state that you can file for a Chapter 13 bankruptcy four years after receiving a discharge from a Chapter 7 bankruptcy and two years after receiving a discharge from a Chapter 13 bankruptcy.

Prevent future bankruptcy.

Before considering bankruptcy you should contact a bankruptcy attorney to ensure you understand the process and that all debts that are eligible for discharge are filed in the bankruptcy case. With the current limits on filing bankruptcy you don’t want to find out that you rushed the process and are unable to support yourself financially after you have filed. Before you file for bankruptcy it is also recommended that you take the time to plan your finances for the future. You should have a budget in place to pay your bills and begin saving money for emergencies to avoid putting yourself in the same position in the future. The last thing you want to do is file for bankruptcy only to repeat the cycle and end up struggling to stay afloat in a few years.