Orange County Bankruptcies | Bankruptcy Blog

With the cost of living as high as it is in Orange County – particularly the cost of renting or owning a home in popular locations like Irvine, Laguna Beach, Newport Beach and Huntington Beach – it often means that people who have filed a bankruptcy case earlier in life must do so a second time.

The first bankruptcy case often comes about when someone in their 20s or 30s who rents in an average cost neighborhood such as Tustin, Santa Ana or Costa Mesa, runs into credit problems due to easy access to credit cards, car loans and loans for “toys.” A person filing bankruptcy in their twenties often elects to file a Chapter 7 “straight” bankruptcy case, because it’s best suited to their situation.

However, the same person might become unemployed a few years later – unable to pay their home loan payments on the home they purchased in a family community such as Mission Viejo, Rancho Santa Margarita, Foothill Ranch or Laguna Niguel. If this is the case, a bankruptcy plan may be needed to bring home loan or tax payments current – something that a Chapter 13 “payment plan” bankruptcy can help with.

The good news is that the Bankruptcy Code does not limit the number of times a person can file for bankruptcy. So, it is likely that a second bankruptcy case can be filed. The Bankruptcy Code does have limits, though – a minimum amount of time must pass before a debtor can file a second bankruptcy case and obtain a discharge of his or her debts.

More good news:  The Bankruptcy Code allows people to file a bankruptcy case as soon as two years (yes, 2 years!) after the first case and obtain a discharge – depending upon the type of case previously filed and the type of case to be filed. So don’t be discouraged if you find yourself in need of a second bankruptcy – it happens more often than you might think. Talk to an attorney or lawyer about your situation. He or she may be able to help.