How Many Times Can You File Bankruptcy? A Detailed Guide

Today’s topic: How often can you file for bankruptcy?

Life can bring unexpected financial challenges, and sometimes bankruptcy becomes a necessary step to regain control.

If you have already filed for bankruptcy once, you might be wondering: how many times can you file bankruptcy? Is it possible to file multiple times? And what rules govern repeat filings?

Hi. In today’s blog, I will provide you with the answer to how often you can file for bankruptcy. So, if that’s what you want to know, you have come to the right place!

Therefore, keep on reading this article till the end, and thank me…

Understanding Bankruptcy

Before I tell you the answer to how often can you file for bankruptcy, let me tell you a little about the process!

Bankruptcy is a legal process designed to help individuals and businesses who are unable to repay their debts.

It offers a fresh financial start by either wiping out many debts or creating a repayment plan that fits your income. The two most common bankruptcy options for individuals are Chapter 7 and Chapter 13.

How Often Can You File For Bankruptcy?

What might really shock a lot of people is the fact that there is really no limit to filing for bankruptcy. Yes, you read that right!

There are no restrictions on the number of times a person may apply for bankruptcy. However, there are still some intervals (read: waiting periods) during which the discharge of debts cannot be obtained.

These intervals are conditional upon the chapter of bankruptcy that was previously filed and the chapter that is currently being filed.

The Two Main Types of Bankruptcy

If you are going to bankruptcy and you have had a look at the different types, it will help you to choose which one fits your case best. It is a hotel overview:

Chapter 7 Bankruptcy — The “Quick Clean Slate”

It not only eliminates most unsecured debts such as credit card balances and medical bills in most cases, but also that is achieved usually in a few months.

On the other hand, depending on your state’s exemption laws, you might be asked to give up a part of your property.

This kind of debt discharge is usually the most suitable for people with very low income that need a fast way to get rid of their debt.

Chapter 13 Bankruptcy — The “Repayment Plan”

The method in which Chapter 13 operates is totally different.

Instead of completely getting rid of debts straight away, it gives you the opportunity to hold on to your property while repaying your debts over a period of three to five years through a court-approved repayment plan.

This scenario is most often associated with those who have a regular income and aim to resolve their arrears, such as getting up-to-date with their mortgage or car loan.

Waiting Periods for Filing Chapter 7 Bankruptcy Again

In the event you contemplate to file for bankruptcy under the Chapter 7 more than once, it is essential that you be cognizant of the fact that the law sets definite limits:

Once you got a discharge in a Chapter 7 case (that is the debts were eliminated), it is necessary that you wait a period of eight years from the date of that case before you can file Chapter 7 again.

The purpose of this eight-year waiting period is to make sure that the bankruptcy system is not misused, and that the debtors do not keep erasing debts without trying to improve their financial behavior.

How Often Can You File For Bankruptcy With Chapter 13?

It should be taken into consideration that Chapter 13 gives some flexibility in terms of how often the case can be filed.

As to the case when a discharge is granted to you in a previous Chapter 13, a minimum of two years from the day of that particular case submitting is the time you are given before one more filing of Chapter 13 can be made and thus getting the discharge a new one.

On the contrary, it is also relevant to bear in mind that the main objective of Chapter 13 is to repay debt in installments within a period that is set. Hence, people might be willing to revise their finances several times.

Can You Switch Between Chapter 7 and Chapter 13 Bankruptcy?

It is the case that people often query about the influence of switching on the number of times you can file bankruptcy between Chapter 7 and Chapter 13.

Well, the answer to that is a YES. However, there are a few rules and some timing regulations. Here is the situation:

• In the event of filing Chapter 7 and obtaining a discharge, you can only file Chapter 13 and get another discharge after a period of four years.
• Usually, if you give proof of filing a Chapter 13 case and getting a discharge, before refiling Chapter 7, you have to wait six years, except if you have repaid 70% of your unsecured debts and complied with other conditions that allow for a shorter waiting period.

Switching chapters can also be seen as a tactical step that depends on the financial objectives and the situation of an individual.

Can You File Bankruptcy Multiple Times?

From a legal standpoint, there are no fixed restrictions as to the number of times you can file for bankruptcy.

However, the imposed waiting times will determine when you can enjoy the benefits of discharge again.

Whereas, it is highly advised not to refile bankruptcy in a short period of time after a previous case. Why?

Well, in simple words, that’s because it is highly probable that the court will reject the discharge of your debts. And thus, you will not receive the relief that you have aimed for.

Understanding these time limitations is of utmost importance for strategically planning your filings.

Why Is Knowing This Important?

Repeated bankruptcy filing has a negative effect and can greatly reduce your credit rating and financial situation in the future.

The fact is that the bankruptcy status of your credit report remains for a few years and consequently can hinder your access to loans or houses, and in some cases, even getting a job.

With these lingering effects, bankruptcy should be perceived as a financial tool—a situation where the use of the tool is necessary. Still, it certainly doesn’t solve all problems of financial mismanagement.

In case you want to be safe from the act of filing again, you have to be sure to comply with the next activities with your bankruptcy:

• Budgeting.
• Credit counseling.
• Financial planning.

When Should You Consider Filing Bankruptcy Again?

In case the financial situation in your life has been changed, such as: mislaid job, coming across unplanned medical bills. Or you have been going through tough times, you might have no other choice but to file for bankruptcy again.

Here are some of the things that you should also think about before taking such a step:

• The nature of bankruptcy, which you selected at first (Chapter 7 or Chapter 13).
• The period elapsed since your last filing.
• Whether your number of new discharges complies with the rules of the statute of limitations.

Getting a bankruptcy lawyer’s help will assist you in going over your alternative options, and thus, avoiding filing mistakes that will cause you to waste time in your financial recovery.

Get Yourself The Right Lawyer

In case you are still on the fence about the number of times one can go bankrupt, then I would say that in spite of the fact that multiple filings are permitted,

It is definitely legal to declare bankruptcy multiple times. However, you have to know the timing and rules in order to get the best possible outcome of your debt relief.

The law permits debtors to go bankrupt repeatedly as long as they follow the proper timing and conditions to ensure the most extensive debt discharge possible.

Bankruptcy may be the best option when you are in dire need of a new beginning. It is best that you organize yourself. 

Additionally, get professional assistance if it is necessary, and use bankruptcy as one of the best financial recovery strategies!

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