How Many Times and How Often Can You File Bankruptcy?

This article answers three common bankruptcy timing questions:

  1.  How many times can you file a bankruptcy case? and,
  2.  How often can you file
  3.  How long you must wait in between filings in order to get a discharge of debts

A.  How Many Times Can I File Bankruptcy Chapter 7 Chapter 13 Chapter 11?

There Is No Limit To How Many Times You Can File Bankruptcy Under Any Chapter.

You can file bankruptcy as many times as you need (assuming you are eligible to file bankruptcy under a given chapter).

B.   How Much Time Needed Between Bankruptcy Filings?

You Do Not need to wait to file a new bankruptcy case, unless you need a discharge of debts.

There is no time limit for filing a new case.

That’s right, I said it.  You can file another bankruptcy case right after the prior one is closed.

And sometimes there are very good reasons for doing so (see below).

But usually the key issue is whether or not you can receive a discharge of debts in the new bankruptcy case.   Getting a discharge of  debts is usually (but not always, as explained below) the primary reason for filing a bankruptcy. See More On Discharge of Debts

And the answer to the dischargeability question depends on:

  1. Which chapter you are filing,
  2. Under which chapter you previously filed, and
  3. Whether you received a discharge.

Quick How-To Guide To Determine How Much Time Between Bankruptcy Filings 

Here is the definitive quick-reference guide to how long an individual (not a corporation or partnership) must wait after filing a bankruptcy to file another case if you want to receive a discharge of debts:

Case to be filed–Chapter 7:   You can file a Chapter 7 case and receive a discharge of  dischargeable² debts unless:

  1. you received a discharge in a prior Chapter 7 or Chapter 11 case filed (commenced) within 8 years prior to the filing of the “new” case or,
  2. you received a discharge in a Chapter 13 case filed within 6 years prior (UNLESS the payments made in the Chapter 13 totaled 100% of allowed claims in the case, or at least 70% of the claims were paid and the plan was proposed in good faith and was the “best efforts” of the debtor).  So, if your previous case was a Chapter 13 and you paid 70-100% of claims with the above provisions, then there is no time limit for filing a and receiving a discharge in a subsequent Chapter 7 case.

Case to be filed–Chapter 13: You can file a Chapter 13 case and receive a discharge of dischargeable debts unless:

  1. you received a discharge in a prior Chapter 7, 11, or 12 case filed (commenced) within 4 years prior to the filing of the “new” case or,
  2. you received a discharge in a Chapter 13 case filed within 2 years prior to the “new” case

Case to be filed–Chapter 11:   You can file a Chapter 11 case and receive a discharge of dischargeable debts at any time unless:   the Chapter 11 case is liquidating all (or substantially all) assets and no business is being conducted after consummation of the plan.  In that instance, the time period requirements are the same as for Chapter 7 above.

Important Factors to Remember:

The date that the discharge was entered in the prior case is completely irrelevant.  It is the date the case was filed that starts the time clock running for this purpose.

Also note that if the prior case did not result in a discharge, but was instead dismissed, then there is no time limit on filing a new case (absent a court order to the contrary)

Converted Cases:

If your prior case was originally filed under one chapter, then converted to another chapter, most courts will use the date of the original (pre-conversion) filing date to calculate the time.  But this is an unclear legal issue at this time, and may also vary depending on which chapter under which you seek to file the new case.

Why File Another Bankruptcy Now If I Am Not Eligible For A Discharge Of Debts?

Even if you are not eligible to achieve a discharge of debts, there are still reasons to file the next case, particularly a Chapter 13.

What are they, you might ask?

The automatic stay in bankruptcy, which prevents creditors from taking any collections actions during the bankruptcy case, still applies regardless of the ability of the debtor to discharge debts.

So how is this helpful?

Let’s say you owe tax debts and the IRS wants you to pay them in full within 24 months.  By filing a Chapter 13 case, you can stretch those tax payments over 60 months, at zero percent interest!

Same thing can be done with student loans, although unlike certain taxes, the student loans need not be paid 100% during the 60 month Chapter 13; thus, it may be necessary to file multiple back-to-back Chapter 13 cases to continue the protection on student loan payments.

Or,  let’s say you’ve just filed a Chapter 7 case and gotten your discharge, but you have a junior lien against your home that can be removed in a Chapter 13 case (see information on removing junior liens in Chapter 13 for more details on that).  In that case you can filed the Chapter 13 and remove the lien even though you won’t be getting a discharge!  (and you cannot remove such liens in a Chapter 7)

The above is known to bankruptcy professionals as doing a “Chapter 20” case.

These, and more, are all possibilities to discuss with a qualified and experienced bankruptcy lawyer in your area.


Image Courtesy of Ndevil