How Often Can You File Personal Bankruptcy?

Filing for personal bankruptcy again

Federal law limits how often you can file for personal bankruptcy. The time frame depends on the type of bankruptcy filed and any applicable repayment plans. While the clock starts upon filing, the statute of limitations applies to successful bankruptcies where debts have been discharged. Bankruptcies dismissed prior to resolving or discharging any debt may result in a 180-day wait before you can file another claim.

Types

The two most frequently used personal bankruptcies are Chapter 7 and Chapter 13. Under Chapter 7, some assets may be liquidated prior to discharging most debts. Chapter 13 involves a structured repayment plan organized by the bankruptcy court that allows debtors to keep assets that might otherwise be sold in a Chapter 7 bankruptcy. Most Chapter 7 filings resolve within months, while a Chapter 13 may last up to five years.

Chapter 13

Consumers with a prior Chapter 13 bankruptcy may file for another Chapter 13 two years after filing for the first bankruptcy. Individuals filing a Chapter 7 bankruptcy after a Chapter 13 have no waiting period if all the claims were paid in the original filing. The courts may waive a waiting period for Chapter 7 if 70 percent of the original Chapter 13 debt is repaid and the debtor showed good faith in effort. A prior Chapter 13 filing where less than 70 percent of the debt is repaid results in a six-year wait before filing a Chapter 7 claim.

Chapter 7

An eight-year waiting period applies for individuals filing a Chapter 7 bankruptcy following a previous Chapter 7. Individuals must wait four years after filing a successful Chapter 7 to file a Chapter 13 bankruptcy. Additionally, individuals who filed a previous Chapter 11 corporate or partnership bankruptcy must wait eight years before filing a Chapter 7 personal bankruptcy claim. The statute of limitations applies if any debt was discharged in a previous claim.

Considerations

In addition to limiting filing time frames, the courts restrict "automatic stay" protection for subsequent filings after dismissal of a previous case. The automatic stay prohibits creditors from attempting to collect on a debt during bankruptcy. The stay occurs immediately upon filing and generally remains in effect until the bankruptcy resolves. However, if a bankruptcy is dismissed within a year of filing a new claim, the automatic stay lasts 30 days. More than one dismissal within a year may terminate the automatic stay altogether.

References

• Federal Trade Commission: Knee Deep in Debt
• United States Bankruptcy Court - Central District of California: Before a Debtor Files a Bankruptcy Case
• United States Courts: Chapter 7 Liquidation Under the Bankruptcy Code
• United States bankruptcy Court - District of Massachusetts: The Effect of Repeat Filing on the Automatic Bankruptcy Stay