Going Bankrupt For The Second Time

Oops, looks like you have done it again. If you are already asking yourself what to do now, we have to say that the answer is surprisingly simple: pretty much the same, more or less, what you did the first time you were bankrupt. Moreover, if you do not take this the wrong way, you can even congratulate yourself. To have the second bankruptcy in your life means that you have been successfully discharged from the first one. Additionally, you had a successful recovery from the first bankruptcy and you started earning again. Unfortunately, you did not have enough luck to avoid the same financial trouble for the second time.

So, here we are on the scene of crime for the second time. You have one huge advantage compared to the first time. You have more experience and luckily more psychological stability. In addition, you already know your enemy and the rules of the game you are about to play for the second time. The destiny of your second bankruptcy, including all potential and real consequences is strongly determined and shaped by the first bankruptcy. Based on the reasons which provoked it, how you deal with it, and eventually what happened at the very end of it – your second bankruptcy will be directed dominantly.

Bankruptcy No 1 vs. Bankruptcy No 2

There are no limitations how many times you can declare bankruptcy. However, this does not mean that you should try your luck or test the legal limitations including the patience of your creditors. The analogy with the criminal law is definitely inappropriate, but very illustrative for this purpose. You are already guessing what is happening with the people who are appearing for the second time at the court of law, not to mention the hypothetical third time. In the second time bankruptcy even the sound of it is troubling enough.

One thing is more than certain, your situation will be treated more rigorously. All around you will look at you with different eyes. The second bankruptcy by default implies prejudicial intentional element in your bankruptcy. The first time can always count on the “it can happen to anyone” or “unfortunate event type of excuse”. This also includes some practical consequences. For your first bankruptcy the Official Receiver could have performed the initial inquiry by the phone. You can be more than sure that for the second time you will be obliged to meet personally with the Official Receiver. The same can be applied to your creditors. It is more than certain that they will be much less ready to compromise on certain things with you having in mind that you have been stigmatized for the second time for the terrible financial sin of bankruptcy. Bankruptcy restriction orders will be applied for the second time definitely as a rule. You can expect that this “financial vengeance” will have very little consideration to your situation and circumstances which lead to it.

Second Discharge. Hard Financial Times.

If you were very unhappy with the first bankruptcy, the good news is that you will be very happy with the second discharge just like you were with the first one. Nevertheless, the life after the first and second bankruptcy is definitely not the same. You surely remember how hard it was for you to open a new bank account or to apply for the credit, we do not even dare to mention a new mortgage. Now, after the second discharge it is going to be even harder. One more time the analogy with the criminal law is so inappropriate, and yet so convenient. Every time you go to a prison you are narrowing the possibility for the successful reintegration. Every time you face bankruptcy the maneuvering space for your financial operations will be more reduced. Certain banking services will be available under new rigorous and more expensive conditions or even worse not available at all.

The first bankruptcy was not the end of the world for you. It is more than certain that you will survive the second one as well. However, you should not go too far. The rule third time luck cannot be applied here with the same success as in other areas. With the first bankruptcy you have obtained an unofficial Master in bankruptcy. With the second one you are free to consider yourself without any exaggeration being with a PhD in bankruptcy. On the other hand, to enter for the third time in the bankruptcy water is at least to say – too much for both your finances and your nerves as well. One thing is more than sure when it comes to the situation like this one. It is better to write memoirs about your financial adventures after second, rather than after your third bankruptcy, isn’t it?

Andy Gorton is the author and editor of the Bankruptcy Clinic

Andy Gorton – who has written posts on Bankruptcy Clinic Blog.

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