How Often Can You File Bankruptcy?
You might file bankruptcy to give yourself a fresh start, but life can always throw you a curveball in which something unprecedented and unavoidable happens. Perhaps you’re facing a new financial challenge after your last discharge, and now you’re wondering if it’s possible to file bankruptcy again. The short answer is that you can file bankruptcy as many times you like, but you are only able to receive a discharge for it every so often. Apart from student loans and tax debt, most debt can be discharged in a personal bankruptcy case.
This guide will review what you need to know about Chapter 7 and Chapter 13 bankruptcy filings, help you decide whether filing bankruptcy again is a good idea and if so, how soon you should do it.
What Happens If You File for Bankruptcy?
Filing for bankruptcy is a legal process that will help the applicant either completely get rid of their debt or come up with a plan to repay their debt. The process begins with the debtor filing a petition with the bankruptcy court. As the debtor, you must complete several forms detailing personal information such as your assets, income, creditors, and expenses. It is important to note that during this process, creditors cannot collect on their debt. Once you have provided all the necessary information, the court will appoint a trustee who will ensure your secured debt (where property such as your home or car is used as collateral) is collected within the appropriate time.
This opportunity for a fresh financial start comes at a cost in legal fees and damage to your credit score. Filing bankruptcy will remain on your credit report for seven years (if you choose to file Chapter 13) or ten years (if you decide to file Chapter 7). This process can make it difficult to obtain a mortgage or car loan in the future. It can also affect your ability to obtain employment or rent an apartment and increase your insurance rates. Since bankruptcy has long-term legal and financial consequences, consulting with a bankruptcy debt relief agency such as Debt Quest USA is highly encouraged. We will ensure all the paperwork needed is filled out correctly during this confusing and sometimes complicated process. We’ll also explain, in clear terms, exactly what happens if you file bankruptcy.
How Many Bankruptcies Can You File?
If you’re wondering how many years you need between bankruptcies, you need to know that it is possible to file for more than one bankruptcy in your lifetime. In fact, you can submit an unlimited number of bankruptcy cases unless a bankruptcy court orders otherwise, but you are entitled to a limited number of discharges.
There are various types of bankruptcy that individuals or spouses can file for, with the most common being Chapter 7 and Chapter 13. If you’re wondering how often you can file chapter 8 or chapter 13, keep reading.
Chapter 7 Bankruptcy
This petition forgives the debtor of most of their debt through immediate repayment, usually within four to six months. If you choose to file for Chapter 7, you will most likely gather and liquidate available properties such as stocks, jewelry, second homes or cars in order to repay your debt. Chapter 7 bankruptcy is the most popular form of bankruptcy, making up 63% of all bankruptcy cases filed between 2019 – 2020.
How many times can you file chapter 7 bankruptcy? There is not a limit, but you can only obtain a discharge once per 8 years.
Chapter 13 Bankruptcy
This petition allows individuals with a regular income to come up with a plan to repay parts or all of their debts over three to five years. The time period can be shortened but never extended. This option will often avoid liquidation of your properties, enabling you to keep your assets, and once the timeframe is completed, any remaining debt may be removed.
How often can you file a chapter 13 bankruptcy? You’ll have to wait 2 years after getting a full discharge in order to get another discharge.
Both chapter filings have eligibility requirements that vary by state, and attaining legal advice is highly encouraged.
What If You Need to File Again?
Since the goal of filing for bankruptcy is to attain a fresh financial start, the question isn’t “how many times can you file bankruptcy?” instead, “how often will your filing receive a successful discharge of debts?” You can file bankruptcy as many times you need, but the timing between discharges matters. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) is a law that prevents consumers from abusing the bankruptcy process by ensuring people were not merely using it to get out of debt quickly. Before the BAPCA, one could file for Chapter 7 bankruptcy and immediately liquidate their assets regardless of income level.
The BACPA now states that individuals can only file a Chapter 7 if they fall within a certain income bracket depending on the state they file in or pass a means test that shows they cannot afford a payment plan for their debts. If the individual is unable to pass either of the above requirements, they must file for Chapter 13 bankruptcy.
This law limits how often one can file for bankruptcy by stipulating the amount of time between filings. While you are able to file for bankruptcy as many times as you need to, you will not receive a second discharge unless the appropriate amount of time has passed. The law does not limit the order in which chapters are filed, making it possible to file Chapter 7 bankruptcy followed by Chapter 13 or vice versa as the situation permits.
How Many Years Can I Have Between Bankruptcies?
When thinking about whether to file for bankruptcy again, the first question we need to answer is which bankruptcy filing was previously discharged. Check the table below; it will show you how soon you can file Chapter 7 after Chapter 7 and 13, in addition to when you can file Chapter 13 after Chapters 7 and 13.
|First Filing||Second Filing||Time Required|
|Chapter 7||Chapter 7||8 years from the first filing date|
|Chapter 7||Chapter 13||4 years from the first filing date|
|Chapter 13||Chapter 13||2 years from the first filing date|
|Chapter 13||Chapter 7||6 years from the first filing date|
Chapter 7 to Chapter 7 (8 years): If you received a Chapter 7 discharge and want to file Chapter 7 again, you will need to wait eight years before filing again. Please note that the eight years begins on the original date of the previous Chapter 7 bankruptcy filing and not the discharge date.
Chapter 7 to Chapter 13 (4 years): If you previously filed a Chapter 7 bankruptcy, successfully received a discharge, and would like to file a Chapter 13 case, you will need to wait for four years after the date of filing of your Chapter 7.
Please note that this time limit only refers to receiving another discharge. You may find yourself in a situation where you want to file a Chapter 13 after a Chapter 7 and do not intend on receiving a discharge. Perhaps you are behind on secured payments, like a real estate mortgage, after your Chapter 7 and need the safeguarding a bankruptcy court provides to stop a foreclosure. Perhaps your car payments are more than your monthly income can handle, and filing a Chapter 13 can give you relief by providing you with a payment plan without needing a second discharge. These scenarios are quite common and are informally referred to as “Chapter 20”.
The point of filing in this order is not to discharge the debts but to secure additional time to catch up on them. It can be difficult to qualify for a Chapter 7 bankruptcy and then show you have the means to pay for a Chapter 13 plan, so please consult with a bankruptcy service before taking this route.
Chapter 13 to Chapter 13 (2 years): If you successfully filed a Chapter 13 case in the past and are looking to file a Chapter 13 case again, you need to wait at least two years from the filing date of the previous case.
Chapter 13 to Chapter 7 (6 years): If you received a Chapter 13 discharge and now are considering filing a Chapter 7 case instead, you need to wait six years from the first filing date.
If you paid back all debts in your Chapter 13 plan (or in some cases at least 70% of your total debts) and the new case is proposed in good faith and provides your best efforts, the six-year waiting period can be waived.
Since you cannot file bankruptcy sooner than the time permitted by law, being in contact with the right bankruptcy services is essential on your second bankruptcy to guide you through the process.
What if the First Case Was Not Discharged?
If the court dismissed the first case, you can file again and receive a discharge in the second bankruptcy case unless the court instructs otherwise. You may need to wait 180 days to file a second time if you voluntarily dismissed the first filing or failed to obey a court order.
If the court denied your discharge, you might be allowed to file again but may not be eligible for a discharge of the debts listed in the first case. There are other special circumstances that you may or may not qualify for, and it would be wise to seek the advice of an experienced bankruptcy agency.
The Bottom Line
Declaring bankruptcy a second time is more complicated, has strict guidelines, and will cause greater financial stress. There are plenty of specifics a qualified expert can evaluate and guide you through. Filing bankruptcy is the last resort, and consulting with a bankruptcy debt relief agency can show you other options you may have. Get help with your debt today at Debt Quest USA.