2nd bankruptcy
If you have already had a first bankruptcy, and your credit becomes unmanageable, if you have mental illness, what happens when you go bankrupt again?
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Yes, a second bankruptcy would discharge the debt. However, a second bankruptcy is more complicated than a first bankruptcy, and more costly, and given that she is currently unemployed, it may not be wise at this time. I suggest she speak to a trustee to explain the pros and cons of a second bankruptcy in her situation.
There are 2 major things that take place.
1. You would no longer be eligible for an automatic discharge. Ultimately this means at the end of your discharge you will be required to go to court. It will be the court who will determine how long you will have to stay in bankruptcy for as a result of it being your 2nd time. As there is no hard and fast criteria for the length of time you can expect to be in bankruptcy for, the rule of thumb seems to be 21 months in total.
2. There is a more severe impact on your credit rating. A second bankruptcy will be listed as an R9 (lowest level) for a maximum of 14 years from the date you are discharged from the second bankruptcy.
As a result of this, many people prefer to consider filing a consumer proposal as it helps one to avoid a bankruptcy, but still permits one to settle their debts with their creditors. For more information on this you should contact a licensed trustee in your area.