How Many Times Can I File For Bankruptcy?
Once you have filed for bankruptcy, then certain rules have to be followed before you can file for another one.
There are generally 2 chapters under which you can file a personal bankruptcy - and depending on the chapter (7 or 13) that you initially filed under, you can file for another bankruptcy if the need arises.
Given below are 2 of the most common chapters under which you can file your bankruptcy, and the time periods that must elapse before you can file for bankruptcy again.
Filing under Chapter 7
Most people file for bankruptcy under chapter 7, since it allows you to liquidate your unsecured debts, such as credit cards or hospital bills. In this case, a trustee is appointed by the court who will then dispose of all your non-exempt assets to pay off all your debt.
So, if you have limited non-exempt assets, then this is a quick way of getting out of the debt trap.
Many types of taxes, student loans or child support claims can be disposed of faster under chapter 7 laws. If you manage to get your creditors to sign a reaffirmation agreement, then you can continue to pay your car or home mortgage loans while still retaining possession of your assets.
However, depending on your case and the amount of your outstanding debt, you could still lose a substantial part of your assets. That said, filing under chapter 7 can provide you with a fresh start in just a few months, compared to filing under chapter 13.
If you have been granted a chapter 7 discharge, or completed a chapter 13 bankruptcy plan in the last 8 years, then you cannot file for another bankruptcy under chapter 7.
If you manage to get a discharge under chapter 7, then you will have to wait another 6 years before you can get a discharge from a chapter 13 bankruptcy.
Filing under Chapter 13
If you are still employed and receiving regular salary, or are receiving business income on a regular basis, then filing for bankruptcy under Chapter 13 will give you a chance to repay your old debts within a 5 year period. You will also be able to retain your assets.
A repayment plan will need to be worked out between you, your creditors and your bankruptcy attorney. It will need to be approved by the bankruptcy court.
After your bankruptcy attorney submits the written repayment plan, the court will appoint a trustee, who will then collect the monthly payments and hand it over to your creditors.
This process has to start within 45 days after you have filed for bankruptcy under Chapter 13. You will need to strictly follow the repayment plan. If you do that, then you can get a ‘discharge’ at the end of the repayment period.
Even if your creditors do not approve your repayment plan, you can still go through with it, provided the court is satisfied with the plan. Your creditors however, can file an appeal if they do not agree with the plan. This is where it pays to have a good, knowledgeable bankruptcy attorney.
Your case can be discharged every 2 years if you have filed under Chapter 13. If you get a discharge under Chapter 13, then you will need to wait another 4 years to get a discharge from a Chapter 7 filing.
Generally, there is no limit to the number of times that you can file for bankruptcy; but it all depends on the number of times you have received a discharge from your case.