Exactly When Can You File Bankruptcy Again?
Bankruptcy is a tough choice, and the idea of going through it more than once can be troubling. However, many people do find that they need to file more than once in their lives. Congress has made sure you can't file certain types of bankruptcies back-to-back to prevent people from abusing bankruptcy.
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Abuse Prevention
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Congress enacted the Bankruptcy Code to regulate bankruptcies pursuant to its power under Article I, Section 8 of the United States Constitution. Bankruptcy is a powerful form of debt relief, and the potential for people to abuse the system is great. To reduce the potential for abuse, bankruptcy filings must be spaced out. How far apart the bankruptcies must be depends upon the type of bankruptcy you've filed in the past and whether you received a discharge.
Chapter 7
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Chapter 7 bankruptcy discharges most of your unsecured debt without repayment. Chapter 7 cases last only three to five months. Occasionally a Chapter 7 case with assets or accusations of fraud will last much longer, but most Chapter 7 cases are simple, no-asset cases, and after a few months and one hearing, your debt is gone. Because Chapter 7 is relatively easy and provides a fairly absolute discharge, you must wait eight years in between Chapter 7 cases. If you filed a previous Chapter 7 case and received a discharge, you must wait eight years from the date you filed that previous case. The same is true if you received a discharge in a previous Chapter 11 case. If your previous case was a Chapter 13 case or a Chapter 12 case, you need to wait six years unless you paid your creditors 100 percent in that previous case or at least 70 percent with your best effort, in which case you can file a Chapter 7 at any time.
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Chapter 13
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Chapter 13 bankruptcy is an individual bankruptcy that allows you to reorganize your debt and repay it over a three- to five-year period. At the end of the case, you obtain a discharge of your remaining debt. Chapter 13 cases are a lot of work and a lot of stress. If you have a previous Chapter 7 case and received a discharge, you can file a Chapter 13 case four years after you filed your Chapter 7 and receive a discharge. If you have a previous Chapter 13 case and received a discharge, you need to wait only two years. You can still file a Chapter 13 if the four years or two years have not yet elapsed, but you will not receive a discharge in that case.
Chapter 11
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Individual Chapter 11 cases are rare, but they do happen. If you make too much money to file Chapter 7 and have too much debt to file Chapter 13, you can file a Chapter 11 case. If you have a previous bankruptcy, you do not need to wait to file a Chapter 11.
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