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Just as there are different types of bankruptcy, there are different rules as to how often you can declare bankruptcy. The waiting period for filing another bankruptcy case generally ranges from two to eight years, depending on the type of bankruptcy. In some situations, there may be no waiting period.
This guide focuses on Chapter 7 and 13 bankruptcies, the most common types for individuals. Other types of bankruptcies – chapters 9, 11, 12 and 15 – focus on municipalities, businesses, family farmers and fishers, and bankruptcy filings involving more than one country.
Details on how often you can file for bankruptcy can be tricky to navigate. If you’re an individual trying to figure out if you can file for bankruptcy again, this guide can help point you in the right direction.
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How often can you declare bankruptcy?
How often you can declare bankruptcy depends on the type of bankruptcy. For example, the wait times for Chapter 7 and Chapter 13, two common types of bankruptcy for individuals, are different (you can find details on these two chapters below).
But waiting periods only apply if your debts were successfully discharged in the previous bankruptcy case – a bankruptcy discharge releases you from liability for debts included in a bankruptcy filing. This means that you do not have to wait to submit your application if your file has been rejected and your debts have not been paid. In this situation, you can file for bankruptcy at any time as long as none of the following has happened in the last 180 days:
- You disobeyed court orders and your case was dismissed.
- You did not show up for a court appearance and your case was dismissed.
- You got the case voluntarily dismissed.
How often can you file for Chapter 7?
Chapter 7, also known as liquidation bankruptcy, involves liquidating certain assets belonging to the debtor and selling them to pay creditors.
If your previous bankruptcy case was Chapter 7 or Chapter 11 and you want to file a new Chapter 7 case, you must wait at least eight years after the previous bankruptcy was filed. Individuals can also file to reorganize their finances under Chapter 11, but this is usually a bankruptcy option used by businesses.
The guidelines are more complicated if your previous bankruptcy case was Chapter 13 and you wish to file a Chapter 7 case:
- There is no waiting period for Chapter 7 if all creditor claims have been paid in the previous Chapter 13 case.
- There is no waiting period for Chapter 7 if 70% of creditors’ claims have been paid in the previous Chapter 13 case and the Chapter 13 repayment plan was a “good faith” proposal that represented the applicant’s “best efforts”. Best effort means that, at a minimum, you must use all of your disposable income (income after living expenses and mandatory payments) to pay creditors.
- There is a six-year waiting period for Chapter 7 after the previous Chapter 13 case if less than 70% (and up to 100%) of claims have not been paid in the previous Chapter 13 case .
How often can you file for Chapter 13?
In Chapter 13, often called a salaried plan, a debtor can pay some or all of their debts under a court-approved plan lasting three to five years.
If your previous bankruptcy case was Chapter 7 and you are looking to file for Chapter 13 bankruptcy, you usually have to wait at least four years after filing for Chapter 7 bankruptcy. But if your previous bankruptcy case was in Chapter 13 and wish to file another Chapter 13 bankruptcy case, the waiting period generally drops to two years from the filing of the previous bankruptcy case.
How many times can you declare bankruptcy?
Although there is often a wait time to file another Chapter 7 or Chapter 13 bankruptcy case, there is no limit to the number of times you can file.
But while you can file for bankruptcy more than once, keep in mind that doing so could prolong the damage to your credit. A Chapter 7 bankruptcy can remain on your credit report for 10 years from the time the case is filed, and a Chapter 13 bankruptcy can appear on your credit report for seven years after the case is filed.
Double Filing (Chapter 20 Bankruptcy)
Double filing, informally called Chapter 20 bankruptcy, refers to filing a Chapter 13 case right after a Chapter 7 case is closed. Chapter 20 is not officially part of the US Bankruptcy Code. Instead, it’s slang for double ranking (7+13=20). Filing a Chapter 13 case after a Chapter 7 case has its pros and cons.
The main benefit of Chapter 20 is that it can allow you, over time, to erase more debt than if you just sued Chapter 7 or Chapter 13.
Chapter 7 bankruptcy allows you to get rid of unsecured debts such as credit card bills and medical bills. Meanwhile, Chapter 13 lets you set up a three- or five-year repayment plan for at least some of your secured and unsecured debt.
Filing Chapter 7 first can allow you to reduce your debt to fall below Chapter 13 debt limits. Additionally, filing Chapter 13 after completing a Chapter 7 case can give you more time to catch up on outstanding debts, such as mortgage and car. Payments.
Here is a summary of the benefits of double depositing:
- This can allow you to clear more debt over time.
- This may allow you to first reduce your debts under Chapter 7 to qualify for Chapter 13.
- This gives you more time to catch up on outstanding debts.
Here are some of the disadvantages of double depositing:
- You still won’t be able to pay certain debts, such as alimony and child support and certain tax bills.
- You must wait four years before filing Chapter 13 to receive a full discharge of Chapter 7 debts.
- You will need to prove to the court that you are acting in good faith by pursuing Chapter 13 after Chapter 7.
- Filing for both types of bankruptcy will lengthen efforts to get your finances back in shape.
Strategy to use in a second repository
If you are considering filing for a second bankruptcy, it is important to develop a plan to make the process as smooth as possible. Here are five steps to consider:
- Decide if there is an alternative to filing for bankruptcy that will help ease your debt burden. Consider all of your debt relief options before filing for bankruptcy again.
- Determine what type of bankruptcy to file a second time if no other options are available.
- Research the consequences of a second bankruptcy, such as how it will affect your credit or if you will lose any of your assets.
- Determine the waiting time between the first bankruptcy you filed and the second bankruptcy you want to file.
- Choose to file the second bankruptcy yourself or seek the help of an attorney.
Your credit report and several deposits
If you have filed two or more bankruptcies, they will appear on your credit report for several years. They may even overlap, meaning both bankruptcies appear on your credit report. A completed Chapter 7 case can stay on your credit report for up to 10 years, and a completed Chapter 13 case can stay on your credit report for up to seven years.
Here are some potential credit consequences of multiple bankruptcy filings:
- The loss of an “automatic stay”. This could result in the loss of what is known as an “automatic stay”. An automatic stay prevents certain creditors from trying to collect debts from a bankrupt filer.
- A lower credit score. This will maintain your credit score for as long as one or both bankruptcies appear on your credit report.
- Difficulty obtaining credit. This will likely make it harder to get credit, like a mortgage or a credit card.
- Other issues. This can create problems when trying to rent an apartment, find a job, or purchase insurance.
Other Debt Relief Options
Bankruptcy is considered an option of last resort for debt relief. Fortunately, alternatives are available. They include:
- Seek help from a consumer credit counselor. A consumer credit counselor can develop a debt management plan designed to eliminate some or all of your debt. In many cases, consumer credit counseling is offered by non-profit organizations.
- Take out a debt consolidation loan. The goals here are to combine multiple debts into one monthly payment and to reduce higher interest rate debts.
- Contact a debt settlement company. For-profit companies usually offer debt settlement programs. These programs can help you reduce your debts by negotiating with your creditors. However, debt settlement programs carry risks and are generally a last resort.
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You can declare bankruptcy more than once, but there is usually a waiting period between bankruptcy filings. How long you will have to wait depends on the type of bankruptcy you filed previously and your intention to file next.
Frequently Asked Questions (FAQ)
Can I declare bankruptcy more than once?
Yes, you can declare bankruptcy more than once. But you may find that a bankruptcy court imposes time restrictions when you enter a multi-filing territory.
Is there a waiting period between bankruptcy cases?
In many cases, there is a waiting period. Depending on the type of bankruptcy, you could end up waiting at least two years after completing a bankruptcy case before you can file again.
What are the most common types of bankruptcy for individuals?
The most common types of bankruptcy for individuals are Chapter 7 and Chapter 13. Chapter 7 involves selling your assets and applying the proceeds to paying off debts, while Chapter 13 places a debtor on a plan. debt repayment for three or five years.
How long does bankruptcy stay on your credit report?
A Chapter 7 case stays on your credit report for up to 10 years, and a Chapter 13 case stays on your credit report for up to seven years.