How Long Do You Have to Wait Between Bankruptcies?

While bankruptcy offers significant relief from overwhelming debt, understanding the rules for re-filing is important for anyone who might need this protection again. There are specific timeframes that must pass between bankruptcy filings to ensure eligibility for a new discharge of debts. These waiting periods vary depending on the type of bankruptcy previously filed and the type intended for a subsequent filing.

Key Bankruptcy Chapters

Bankruptcy law offers different chapters designed to address varying financial situations. Chapter 7 bankruptcy, known as liquidation bankruptcy, allows for the discharge of most unsecured debts, such as credit card balances and medical bills. This process typically involves the sale of non-exempt assets to repay creditors, though many filers retain their essential property due to exemption laws.

In contrast, Chapter 13 bankruptcy involves a repayment plan for individuals with regular income. Under this chapter, debtors propose a plan to repay all or a portion of their debts over a period, typically three to five years. This approach allows individuals to retain their assets while making structured payments to creditors. Chapter 13 is often chosen by those who want to catch up on mortgage or car payments, or who do not qualify for Chapter 7.

Standard Waiting Periods

The waiting period for filing a subsequent bankruptcy and receiving a discharge depends on the combination of bankruptcy chapters involved. These timeframes are generally calculated from the filing date of the previous case to the filing date of the new case.

If an individual previously filed for Chapter 7 bankruptcy and wishes to file another Chapter 7, they must wait eight years from the filing date of the first case to be eligible for another discharge. This is the longest waiting period among the different combinations, reflecting the comprehensive debt relief provided by Chapter 7.

For those who previously filed Chapter 13 bankruptcy and plan to file another Chapter 13, the waiting period is two years from the filing date of the prior case. While this period is relatively short, a Chapter 13 repayment plan typically lasts three to five years, meaning that in most scenarios, the previous case would have already concluded. This two-year rule ensures a minimal gap between successful repayment plans.

When transitioning from a Chapter 7 to a Chapter 13 filing, the waiting period is four years from the Chapter 7 filing date to be eligible for a discharge in the Chapter 13 case. An individual can file Chapter 13 sooner than four years after a Chapter 7, but they will not be eligible for a discharge of debts in the new Chapter 13 case.

Conversely, if an individual filed Chapter 13 previously and now seeks to file Chapter 7, the standard waiting period is six years from the Chapter 13 filing date. This period also applies to discharge eligibility in the subsequent Chapter 7 case.

Factors Influencing Waiting Periods

Several factors can influence or modify the standard waiting periods between bankruptcy filings, primarily related to the outcome of the previous case. The most significant distinction lies between a case that resulted in a discharge of debts and one that was dismissed. A discharge signifies the successful completion of the bankruptcy process, legally releasing the debtor from liability for eligible debts.

If a previous bankruptcy case was dismissed without prejudice, it generally means the debtor can refile immediately. However, if a case is refiled within one year of a dismissal, the automatic stay, which temporarily halts creditor actions, may be limited to 30 days in the new case. If two or more cases were dismissed within the prior year, the automatic stay may not be granted at all without a specific court order.

A dismissal with prejudice, however, carries more severe consequences. This type of dismissal typically occurs when the court finds dishonesty, abuse of the bankruptcy system, or willful failure to obey court orders. In such instances, the court can impose a waiting period, often 180 days to a year, before the individual can refile. In more egregious situations, a dismissal with prejudice might permanently bar the discharge of specific debts that were included in the dismissed case.

The outcome of a Chapter 13 repayment plan can also impact future filing eligibility. If the previous Chapter 13 plan paid 100% of the unsecured debts, the six-year waiting period for a Chapter 7 discharge may not apply. Additionally, if the Chapter 13 plan paid at least 70% of unsecured claims, and the plan was proposed in good faith and represented the debtor’s best effort, the six-year waiting period for a subsequent Chapter 7 discharge can also be avoided.