How Often Can You File for Bankruptcy? Rules Explained[yoast-breadcrumb]
How Often Can You File for Bankruptcy? Rules Explained
Filing for bankruptcy can provide much-needed relief if you’re struggling with overwhelming debt. But bankruptcy is not a solution that can be used over and over again. There are rules about how often you can file.
This article will explain the bankruptcy rules on eligibility and waiting periods between filings. We’ll cover the most common bankruptcy chapters – Chapter 7 and Chapter 13 – so you understand how often you can file bankruptcy.
The Waiting Period Between Bankruptcy Filings
You can file for bankruptcy as many times as you want. There’s no limit on the number of bankruptcies you can file in your lifetime. But there are waiting periods between filings for a discharge of debts.
A discharge releases you from personal liability for certain debts and prevents creditors from taking action to collect on those debts. The waiting period between filings gives you a fresh start before being eligible for another discharge.
Chapter 7 Bankruptcy Waiting Period
For Chapter 7 bankruptcy, the waiting period between discharges is 8 years. This means you can receive a Chapter 7 discharge of debts, then have to wait 8 years before becoming eligible for another Chapter 7 discharge. During those 8 years, creditors can still pursue debts that weren’t discharged in your previous bankruptcy.
Some key points on the 8-year waiting period:
- The 8 years is counted from the filing date of your previous Chapter 7 bankruptcy, not the discharge date.
- You have to wait the full 8 years, even if you didn’t get a discharge in your previous Chapter 7 case.
- If your previous Chapter 7 case was dismissed (not discharged), the 8-year waiting period still applies.
This 8-year waiting period only applies to filing another Chapter 7 case. It doesn’t prevent you from filing under a different bankruptcy chapter, like Chapter 13.
Chapter 13 to Chapter 7 Waiting Period
If you previously filed Chapter 13 bankruptcy, the waiting period to file Chapter 7 is shorter. It depends on whether you received a discharge in your Chapter 13 case:
- Discharged Chapter 13: The waiting period is 4 years from filing date.
- Dismissed Chapter 13: The waiting period is 6 years from filing date.
However, if you paid at least 70% of unsecured claims in your Chapter 13 plan, there is no waiting period to file a new Chapter 7 case. You can file immediately for a Chapter 7 discharge.
Multiple Chapter 13 Bankruptcies
For Chapter 13, there is no set waiting period between filings. You can file multiple Chapter 13 bankruptcies in a row. But any previous Chapter 13 discharges in the past 6 years can impact the automatic stay.
The automatic stay immediately halts collections and foreclosure actions when you file bankruptcy. If you had a previous Chapter 13 discharged in the past 6 years, the automatic stay may only last 30-60 days before creditors can resume collections in your new case.
Eligibility Rules for Frequent Filers
In addition to the waiting periods, there are also some eligibility rules that apply if you are a frequent filer:
- Dismissal due to Failure to Appear: If a previous case was dismissed because you failed to appear at a court hearing or failed to follow court orders, you’ll be ineligible to file again for 180 days.
- “Chapter 20” Restriction: You cannot file a Chapter 7 immediately after completing payments in a Chapter 13 plan. You have to wait at least 2 years after the Chapter 13 payment plan ends before filing Chapter 7.
When You May Be Able to File Sooner
In some limited situations, you may be able to file bankruptcy again without waiting the full time period:
- Chapter 13 Hardship Discharge: If you get a hardship discharge approved in Chapter 13, you can file Chapter 7 immediately after.
- Chapter 12 to Chapter 7: The waiting period from Chapter 12 family farmer bankruptcy to Chapter 7 is only 6 months.
- Chapter 11 to Chapter 7: There is no waiting period to file Chapter 7 after a Chapter 11 business reorganization case.
Steps to Prepare for Filing Again
If you are considering filing bankruptcy a second or third time, be sure to take these steps:
- Review your credit report and make sure previous bankruptcies are reporting accurately
- Research current bankruptcy laws and rules on waiting periods
- Consult a bankruptcy attorney on your specific situation
- Gather required documents like tax returns, pay stubs, bills, and asset/debt lists
- Complete the pre-filing credit counseling course
- Stop using credit cards and don’t take on new debt before filing
Understanding the rules on how often you can file bankruptcy will help you plan appropriately. The waiting periods limit how frequently you can discharge debts but bankruptcy can still be filed multiple times if needed.
If you are drowning in debt again after a previous bankruptcy, don’t hesitate to explore your options. Just be sure to consult with a bankruptcy attorney to go over the timing and make sure it’s the best solution for your situation.
- There is an 8-year waiting period between Chapter 7 bankruptcy discharges.
- Previous Chapter 13 bankruptcies have a shorter waiting period of 4-6 years.
- You can file Chapter 13 multiple times with no waiting period.
- Eligibility rules prevent filing soon again after dismissal or completing Chapter 13.
- In limited cases, you may qualify to file again sooner.
With the help of an attorney, you can determine if bankruptcy is an option for you even if you’ve filed before. The rules on how often you can file bankruptcy give people a fresh start while preventing abuse of the system.