How Often Can You File for Bankruptcy?

During your lifetime, you can file for bankruptcy protection as many times as you need it. There is no limit to how many times you can file, but there are time limits between filing dates.

You could file but not receive any debt discharge in some cases, so you need to be careful.

The U.S. Bankruptcy Code determines the time limits based on what Chapter you file under. The clock starts on the day you filed the previous bankruptcy case (not the date of the bankruptcy discharge or bankruptcy stay). These time limits refer only to bankruptcies where you have received a discharge of your debts.

The wait times help prevent abuse of the system and high credit card debt that cannot be repaid. You are expected to make your best effort to pay off bankruptcy in between filings.

Reasons to Switch Your Bankruptcy Filing From The Previous Chapter

The type of bankruptcy you file will change your repayment plan, the amount of unsecured debts you owe, and the amount of time the bankruptcy stays on your record. It may make sense to file for a different bankruptcy than you used in your previous case.

A bankruptcy attorney can help you understand the best debt relief options for you. An attorney can't change the time limits between filing dates, but they can help you decide if switching your Chapter is a smart idea. They can also help you prepare to file as soon as the date is available to you.

You can apply one of these strategies to your second bankruptcy filing:

• Switching from Chapter 7 to Chapter 13: If you pay off unsecured debts during Chapter 7, you can file a Chapter 13 to create a repayment plan to pay off tax debt or other debts that were not discharged during the Chapter 7 filing.
• Switching from Chapter 13 to Chapter 7: If you pay back 100% of unsecured debt to creditors, the six-year waiting period can be waived. In some cases, you only need to pay back 70% of unsecured debt. The first bankruptcy case needs to be in good faith in order to file for Chapter 7.
• Repeating Chapter 13 bankruptcy filing: Some people may repeat Chapter 13 filing to manage student loans or tax debts repayment. These debts cannot be discharged, so they must eventually be paid in full.

Multiple Bankruptcies on Your Credit Report

You may need to consider a court date in between filing for multiple bankruptcies. In some cases, an automatic stay can expire before your next bankruptcy discharge is filed. You need to make sure the discharge happens before the automatic stay expires.

Your credit report may have language such as:

• Bankruptcy Chapter 13 - discharged
  Filing date: 01/01/2011
  Status date: 01/01/2014
• Bankruptcy Chapter 13 - discharged
  Filing date: 01/01/2013
  Status date: 01/01/2014

It could also say "there is a bankruptcy on your credit report" or "you have recently filed for bankruptcy" without listing specific details.

Having multiple bankruptcies on your credit history usually means you will have a hard time finding lenders and low interest rates, and you will have a poor credit score for a year or more.

"Chapter 20 Bankruptcy": Filing Another Bankruptcy Before the Time Limit Is Up

The time limits above refer to how long a debtor has to wait to discharge debt through another bankruptcy. If you aren't looking for another debt discharge, but would like to arrange a plan to manage your remaining debts, filing a Chapter 13 bankruptcy immediately after a Chapter 7 discharge might be an option for you.

Filing for Chapter 7 and Chapter 13 in succession is informally called a "Chapter 20 bankruptcy." The process of filing for Chapter 13 right after the Chapter 7 discharge process can be complicated, and many courts will not allow a double filing before the time limit is up. An attorney can explain the strategy behind double filing and how it may fit into your specific circumstances.

Consider the Cons of Double Filing

If you file too soon, you cannot legally have another debt discharge until the time limits have passed, so the process could waste your time and money.

Furthermore, if a judge finds that you have filed again "in bad faith," they will stop your automatic stay (creditors may be able to call you again and demand repayment), unless you can provide clear and convincing evidence that you filed in good faith. They might even throw your case out.

Consider the Pros of Double Filing

Getting a Chapter 7 discharge and immediately filing for Chapter 13 will give you more time to pay back debts that cannot be discharged, such as child support or spousal support.

Similarly, if you just need more time to pay off your debt, you can consider filing for a second Chapter 13 early. This will not discharge any debt but adds another five years to your bankruptcy payment plan. This will buy you more time instead of having automatic wage garnishment applied to your paychecks.

If you did not receive a discharge during the first filing, you might get one in the second bankruptcy.

If you are considering double filing, you need to work with a bankruptcy lawyer to get it right. There are many nuances that could lead a court to declare that you have filed again in bad faith.

Filing for Bankruptcy a Second Time? Get a Free Consultation

Filing bankruptcy can be complicated and depend on the nuances of your situation. Credit repair attorneys know what you are going through and the most effective path to move forward.

There is no easy way to get a fresh start. But, there are options and tactics to help you rebuild credit, pursue a second discharge, or work towards a better financial situation.