How Often Can You Declare Bankruptcy?

Bankruptcy offers a legal path for individuals to gain relief from debt. Specific rules and time limits govern how frequently an individual can file for bankruptcy and receive a discharge of debts. The ability to obtain another discharge depends on the type of bankruptcy previously filed and the type being considered for a new filing.

Refiling Chapter 7

To file for Chapter 7 bankruptcy and receive a discharge, an individual must wait 8 years from the filing date of a previous Chapter 7 bankruptcy to file another Chapter 7 case and be eligible for a discharge. A discharge in Chapter 7 bankruptcy legally eliminates certain unsecured debts, such as credit card balances, medical bills, and personal loans, freeing the debtor from personal liability for these obligations.

This 8-year rule specifically relates to receiving a discharge. The clock for this waiting period begins on the date the previous Chapter 7 case was filed, not the date the discharge was granted. If a previous Chapter 7 case was dismissed without a discharge being granted, the 8-year waiting period may not apply, potentially allowing an earlier refiling for discharge.

Refiling Chapter 13

To obtain another discharge under Chapter 13, an individual must wait 2 years from the filing date of a previous Chapter 13 bankruptcy to file another Chapter 13 case and receive a discharge. A Chapter 13 discharge signifies the completion of a court-approved repayment plan, typically lasting three to five years, after which eligible remaining debts are eliminated.

If a previous Chapter 13 case was dismissed before a discharge was granted, an individual might be able to refile sooner, as the limitation on discharge eligibility would not apply. However, refiling after a dismissal, especially due to non-payment, requires addressing the reasons for the prior dismissal and demonstrating a feasible budget for the new plan. The waiting period starts from the date the prior Chapter 13 case was filed.

Refiling Different Chapters

The rules for obtaining a discharge become more varied when an individual files a different type of bankruptcy than their previous case. If someone previously filed Chapter 13 and now seeks a Chapter 7 discharge, they generally must wait 6 years from the filing date of the Chapter 13 case. This 6-year waiting period can be waived if specific conditions were met in the prior Chapter 13 case, such as paying 100% of all unsecured debts. Another exception exists if at least 70% of unsecured debts were paid under a Chapter 13 plan that was proposed in good faith and represented the debtor’s best effort.

Conversely, if an individual previously filed Chapter 7 and now wishes to file Chapter 13, they typically must wait 4 years from the filing date of the Chapter 7 case to be eligible for a discharge in the subsequent Chapter 13. These timeframes are crucial because they directly impact the ability to receive the benefit of a debt discharge in the new bankruptcy filing. The eligibility for discharge is the central consideration when transitioning between Chapter 7 and Chapter 13 filings.

Implications of Early Filing

Filing for bankruptcy before the required waiting periods have elapsed carries consequences, primarily affecting the ability to obtain a discharge. The most direct implication of filing too early is the denial of a discharge for debts in the new case. This means that even if the bankruptcy case proceeds, the individual remains legally responsible for their debts, undermining the primary purpose of filing for bankruptcy.

In some situations, the bankruptcy court may dismiss the case entirely if it is filed too early, especially if there is no eligibility for a discharge. A dismissal leaves the debtor without the protection of the bankruptcy court, allowing creditors to resume collection efforts. While a case might technically be filed, the critical benefit of debt relief, the discharge, is often unavailable if the statutory time limits are not respected. This emphasizes that while bankruptcy laws do not limit the number of times one can file, they strictly regulate the periods between discharges.