How Many Times Can You File for Bankruptcy?
Technically, there are no limits as to how often you can file for bankruptcy. There is, however, a limit to how often you can be discharged from your debts. A discharge is the main goal of filing for bankruptcy.
WHAT IS BANKRUPTCY DISCHARGE?
Bankruptcy discharge occurs when you’ve met all the requirements of your bankruptcy case. The court enters an order removing the applicable debts and you no longer have to pay the creditors.
In a Chapter 7, a person’s assets will be liquidated and used to pay off their debts. After that, the bankruptcy is discharged.
- To File Another Chapter 7: you must wait 8 years from the date you filed your previous Chapter 7 to receive another discharge.
- To File Chapter 13: you must wait 4 years from the date you filed your previous Chapter 7 to receive another discharge.
In a Chapter 13, a person’s finances are reorganized into a plan that allows them to pay back their creditors over three to five years while maintaining control and ownership of their assets. Once satisfied, the bankruptcy is discharged.
- To File Chapter 7: you must wait 6 years from the date you filed your previous Chapter 13 to receive another discharge. There is an exception: you can obtain a full discharge of your debts in a Chapter 7 bankruptcy, even if you file within 6 years, but you must have paid your unsecured creditors 70% or more during your previous Chapter 13 bankruptcy.
- To File Another Chapter 13: you must wait 2 years from the date you filed your previous Chapter 13 to receive another discharge.
If your bankruptcy discharge was denied, you may be able to file again. However, you might not be entitled to a discharge of the debts that were denied in your first filing.
If your case was dismissed, then you may file again, unless the court prohibits you otherwise. In some cases, a 180-day waiting period may apply.
WHY FILE BANKRUPTCY IF DISCHARGE IS NOT AN OPTION?
Sometimes filing for a Chapter 13, even if the discharge is not an option, can be an advantageous tool. In a Chapter 13 bankruptcy, you are able to make payments to the trustee under a court-approved payment plan. Usually, the amount you pay under the payment plan is considerably less than what you’d pay to your creditors without it. So even if your debt is not discharged, a Chapter 13 payment plan can give you a bit of breathing room to straighten out or catch back up on your finances.