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How Often Can I File for Bankruptcy?

Anyone can have financial difficulties. Sometimes the best option is getting debt relief through bankruptcy. Filing for bankruptcy can help with debt problems like credit card debt, medical bills, and other financial obligations to creditors.

Going through the bankruptcy process once is enough to get most people back on their feet. However, some people continue to struggle with unmanageable debts. Filing a second bankruptcy may be necessary to truly get a fresh start. Bankruptcy law can be complicated, but a second bankruptcy case can be more difficult. You can get answers to your bankruptcy law questions from an experienced bankruptcy attorney.

What Is the Waiting Period Between Bankruptcies?

The waiting period between bankruptcy filings depends on the type of bankruptcy. The two most common forms of personal bankruptcy are Chapter 7 and Chapter 13. With either filing, debtors generally have to get credit counseling first. After filing, there is an automatic stay to stop creditors from taking legal action like wage garnishments.

Chapter 13 bankruptcy is for personal debt restructuring. The filer creates a payment plan and pays the trustee regular payments for three to five years. Creditors get a portion of what they are owed, and the debtor gets to keep their property. After the plan is completed, the bankruptcy discharges any remaining debt, and the filer has a fresh financial start.

Chapter 7 bankruptcy is a liquidation bankruptcy. The bankruptcy trustee takes control of the person’s assets and sells them off to give money to creditors. Some assets are exempt from liquidation, but most are sold off. After bankruptcy (four to six months), unsecured debts and secured debts are discharged.

The amount of time you may have to wait between bankruptcy filings is generally:

  • Chapter 7 to Chapter 7: Eight years
  • Chapter 13 to Chapter 13: Two years
  • Chapter 7 to Chapter 13: Four years
  • Chapter 13 to Chapter 7: Six years

How Long Before I Can File a Second Bankruptcy?

Filing for bankruptcy is usually a last resort for financial problems and should not be taken lightly. Bankruptcy is a legal way to eliminate debt. However, it can be subject to abuse. The court system limits how often a person can file for bankruptcy protection. This policy aims to deter people from using bankruptcy to avoid paying creditors.

You can file a Chapter 7 bankruptcy once every eight years. If you enter into a Chapter 13 payment arrangement and default or ask to cancel it, you must wait six years before another Chapter 13 bankruptcy case.

The waiting period starts at the time of the initial filing date and not when you complete your bankruptcy and discharge your debts. Since most Chapter 7 filings take less than six months, you would have to wait about 7.5 years before filing again after a previous bankruptcy.

A Chapter 13 repayment plan usually takes three to five years, so with a two-year time limit, you could file another Chapter 13 during bankruptcy or right after discharge. This can happen when unexpected financial problems like losing a job or a medical emergency occur.

What Happens If My Financial Situation Changes?

If you file for Chapter 13 but your financial situation changes, you can switch from a Chapter 13 filing to a Chapter 7. When this happens, the payment plan stops, and your assets are liquidated to pay off creditors.

There is no waiting period for this type of filing, but if Chapter 7 is granted, you would have to wait eight years to file Chapter 7 or six years to file Chapter 13. If the bankruptcy was dismissed, the waiting period to refile is usually 60 to 180 days, depending on the state.

Is There a Maximum Number of Times I Can File Bankruptcy?

There is no limit to the number of times people can file for bankruptcy. However, with each filing, the bankruptcy court may offer fewer protections. Every bankruptcy filing also takes a hit on your credit score, and it may be more and more difficult to get any credit from lenders in the near future.

Filing bankruptcy a second time may be difficult without the waiting period. A bankruptcy court judge may not be willing to grant a bankruptcy filing if they believe you are abusing the bankruptcy code. If you have questions about filing for bankruptcy again, talk to a local bankruptcy lawyer for advice.