How Soon After Bankruptcy Can I File Again?

Bankruptcy offers a path toward a fresh start, but individuals may wonder if they can file again if future financial challenges arise. Refiling for bankruptcy is possible, yet it is subject to specific legal rules and waiting periods. These regulations maintain the integrity of the bankruptcy system while providing debtors an opportunity for financial recovery. Understanding these rules is essential for anyone considering a subsequent bankruptcy filing.

Understanding Bankruptcy Types and Discharge

To understand the rules surrounding refiling, it is important to first understand the primary types of consumer bankruptcy. Chapter 7, often referred to as liquidation bankruptcy, involves the sale of non-exempt assets to pay creditors, with most unsecured debts eliminated. This process is generally faster, with a discharge often granted within a few months. Chapter 13, conversely, is a reorganization bankruptcy that allows individuals with regular income to repay debts through a court-approved payment plan, typically spanning three to five years. Discharge in a Chapter 13 case occurs only after successful completion of this repayment plan.

A “discharge” in bankruptcy represents a court order that releases a debtor from personal liability for certain debts. This means creditors are prohibited from taking any collection actions on those discharged debts. The waiting periods for refiling are generally calculated from the filing date of the previous bankruptcy case, rather than its discharge date, which is a common point of confusion.

Determining Your Waiting Period for Refiling

The time an individual must wait before filing for bankruptcy again depends on both the type of bankruptcy previously filed and the type of bankruptcy intended for the new filing. These waiting periods are statutorily set, and adhering to them is crucial for obtaining a new discharge. It is important to note that these periods are typically measured from the date the previous case was filed, not the date it was discharged.

If a previous Chapter 7 bankruptcy was filed, an individual must generally wait eight years from that filing date before they can file another Chapter 7 case and receive a new discharge. A shorter waiting period applies if the subsequent filing is for Chapter 13.

An individual who previously filed Chapter 7 must wait four years from that filing date before they can file a Chapter 13 case and receive a discharge. The rules also address filing a Chapter 7 after a previous Chapter 13.

For those who previously filed Chapter 13, a six-year waiting period from the filing date of that Chapter 13 case is generally required before filing for Chapter 7 to receive a discharge. An exception to this six-year rule exists: the waiting period may be shorter or waived if the previous Chapter 13 plan paid 100% of unsecured claims. Additionally, if the Chapter 13 plan paid at least 70% of unsecured claims and was proposed in good faith, representing the debtor’s best effort, the six-year waiting period for a Chapter 7 discharge may not apply.

Finally, if an individual is considering filing another Chapter 13 bankruptcy after a previous Chapter 13 case, the waiting period is typically two years from the filing date of the prior Chapter 13.

Consequences of Filing Before the Waiting Period Ends

Filing a new bankruptcy petition before the waiting period ends can lead to significant repercussions. One consequence is the likely denial of discharge for the debts in the new bankruptcy case. This means the individual will not receive the benefit of having their qualifying debts eliminated, rendering the filing ineffective for debt relief. Creditors would then remain free to pursue collection actions on those debts.

Another important consequence involves limitations on the automatic stay, a protective injunction that typically halts most collection activities by creditors immediately upon filing. If a second bankruptcy case is filed within one year of the dismissal of a previous case, the automatic stay may be limited to only 30 days. To extend this limited stay beyond 30 days, the debtor must file a motion and demonstrate to the court that the new case was filed in good faith.

The limitations become even more stringent for multiple repeat filings. If a third bankruptcy case is filed within one year of the dismissal of two previous cases, the automatic stay may not go into effect at all. In such a scenario, the debtor would need to proactively request that the court impose the stay, providing clear and convincing evidence of good faith to persuade the court. Without such a court order, creditors could continue their collection efforts, including foreclosures, repossessions, or wage garnishments, without interruption.