How Often Can You File Bankruptcy​

Bankruptcy offers a crucial lifeline for individuals and businesses facing overwhelming debt. However, it's not a revolving door. Understanding the rules governing how often you can file for bankruptcy is essential for responsible financial planning. The frequency with which you can file depends on the type of bankruptcy you initially filed and the type you're considering for a subsequent filing.

 

 

The most common forms of personal bankruptcy are Chapter 7 and Chapter 13. Chapter 7, often referred to as "liquidation bankruptcy," involves selling off non-exempt assets to pay creditors. Chapter 13, or "reorganization bankruptcy," involves creating a repayment plan over three to five years. These distinctions significantly impact the rules surrounding repeat filings.  

 

 

 

 

 

If you've previously filed for Chapter 7, the waiting period before you can file again is generally eight years from the date of your prior filing. This rule, codified in the Bankruptcy Code, aims to prevent individuals from repeatedly discharging debts without attempting repayment.

The rules surrounding repeat Chapter 13 filings are more complex. Generally, you can file another Chapter 13 case as long as you haven't received a discharge in a prior Chapter 7 case within four years. However, if you previously filed a Chapter 13 case, there's no set waiting period to file another Chapter 13, but the court will examine the circumstances of the repeated filings.

If you previously filed Chapter 7, you must wait four years from the date of your prior filing to file a Chapter 13 and receive a discharge of your debts. This is known as the four-year rule. If you do not wait the four years, you may still file a Chapter 13, but you will not receive a discharge of your debts.

If you previously filed Chapter 13, you must wait six years from the date you filed your Chapter 13 case to file a Chapter 7 case. However, there are two exceptions: if you paid 100% of your unsecured debts under your Chapter 13 plan, or if you paid at least 70% of your unsecured debts and your plan was filed in good faith and was your best effort.  

 

 

While the Bankruptcy Code establishes these waiting periods, certain circumstances may allow for exceptions or alternative strategies. For instance, if a subsequent financial crisis arises due to unforeseen events like medical emergencies or job loss, a court might consider a hardship discharge or other relief.  

 

 

Furthermore, it's crucial to understand that merely filing a bankruptcy petition does not guarantee a discharge. The court scrutinizes each case to ensure compliance with the Bankruptcy Code and to prevent abuse of the system.  

 

 

Navigating the complexities of bankruptcy law requires expert guidance. A qualified bankruptcy attorney can assess your specific situation, explain the applicable waiting periods, and help you develop a strategic plan for financial recovery. They can also represent you in court and ensure that your rights are protected.  

 

 

 

Filing for bankruptcy is a serious decision with long-term consequences. Understanding the rules governing filing frequency is essential for making informed choices about your financial future. The waiting periods outlined in the Bankruptcy Code aim to balance the need for debt relief with the principle of responsible financial behavior. Consulting with a bankruptcy attorney is highly recommended to ensure you understand your options and adhere to the applicable regulations. While the rules are in place to prevent repeat abuses of the system, the system is also in place to help people find a way out of extreme financial hardship. It is a tool that should be used responsibly and after careful consideration.