Is It Possible To File For Bankruptcy Twice?
Filing for bankruptcy is a difficult and often emotional decision. It is not a choice that should be taken lightly, nor is it a casual solution to one’s financial problems. When it comes to filing for bankruptcy there are many pros and cons to be considered. This is especially true when considering filing for the second time. Filing for bankruptcy twice is possible, but all options should be weighed carefully with the assistance of a professional prior to making that decision.
What To Consider Before Repeat Filing For Bankruptcy
Before you file for bankruptcy, it is important to know that a Chapter 7 bankruptcy can remain on your credit report for 10 years. When you file Chapter 7 bankruptcy, all of your unsecured debts are completely eliminated (with the exception of student loans), yet filing often takes an emotional toll on an individual. This is just after filing for bankruptcy and being discharged once. What if you are stuck with an unforeseen circumstance that lands you deeper in debt than the first time you filed for bankruptcy? Can you file for bankruptcy twice? If so, how many times can you file bankruptcy?
The short answer is yes, you can file for bankruptcy twice and even three times. However, there are some notable restrictions.
The most common types of personal bankruptcy are Chapter 7 and Chapter 13. Up to 65% of all U.S. consumer bankruptcy filings are Chapter 7 cases. While very similar, Chapter 7 Bankruptcy and Chapter 13 Bankruptcy have important differences that will affect your case and how often you can file for bankruptcy. Both Chapter 7 and Chapter 13 bankruptcy may be filed multiple times.
How Often Can You File For Bankruptcy?
Before considering filing bankruptcy twice, one should become familiar with the regulations that state exactly when a second bankruptcy can be pursued. The possibilities are based on what bankruptcy code (or chapter) you were previously discharged from. To file twice or perhaps three times, there is always a waiting period between receiving a discharge from your previous bankruptcy obligations and filing again for a subsequent bankruptcy.
If you did not receive a discharge from your previous bankruptcy, then you are not barred from filing again for bankruptcy. Additionally, if you file again prior to letting the specified time period elapse, your bankruptcy case will not receive a discharge and your debts will remain intact.
How Often Can You File Chapter 7 Bankruptcy?
The typical time frame allowed between filing for a Chapter 7 bankruptcy and being granted a discharge (or relief from debt) is 3-6 months. Once you have received a discharge from a Chapter 7 bankruptcy case, you will be required to wait 8 years from the date of filing to be able to file for bankruptcy again. Filing anytime before the end of that 8-year waiting period will result in the denial of your discharge in the second case. If that happens, you will be legally liable for all of your debts.
The exception to these considerations is if you received a discharge from an outstanding Chapter 7 bankruptcy case and want to file for Chapter 13 bankruptcy. In this case, you must only wait 4 years from the date of the Chapter 7 bankruptcy to file for the Chapter 13 bankruptcy.
Chapter 13 Bankruptcy Discharge
Once you have received a discharge from a Chapter 13 bankruptcy case, you will be required to wait 6 years from the date of filing to be able to file for Chapter 13 bankruptcy once again. Filing anytime before the end of that 6-year waiting period will result in the denial of your discharge in the second case. If that happens, you will be legally liable for all of your debts. The exception to this 6-year waiting period is if you paid 100% of your unsecured debts, or if you received a Chapter 13 bankruptcy “relief in good faith” after paying at least 70% of your unsecured debts.
If you have received a discharge in a previous Chapter 13 bankruptcy case, then you must wait 2 years from the date of the first Chapter 13 filing to file another Chapter 13 bankruptcy. Doing so prior to the 2-year waiting period will result in the denial of your discharge and you will be liable for all debts that went unpaid throughout the Chapter 13 bankruptcy.