Can You File Bankruptcy Multiple Times

Jan 06, 2024 By Susan Kelly

The restrictions for how often you can file for bankruptcy vary depending on the type of bankruptcy you choose to pursue. For most forms of bankruptcy, you'll have to wait anywhere from two to eight years before you can file again.

There could be no mandatory waiting period if certain conditions are met. The most prevalent kinds of personal bankruptcies are discussed here so that you can make an informed decision about your financial future.

Municipal bankruptcy, commercial bankruptcy, bankruptcy for family farmers and fishers, and bankruptcy involving more than one countries fall under Chapters 9, 11, 12, and 15, respectively.

Circumstances that limit how often you may petition for bankruptcy might need to be clarified. This manual will correctly point you out if you're an individual wondering if you're eligible to file for bankruptcy again.

How Frequently May You Declare Bankruptcy?

The number of times someone can petition for bankruptcy varies from one category to the next. Two typical varieties of personal bankruptcy, Chapter 7 and Chapter 13 have varying waiting periods. A bankruptcy discharge absolves you of liability for debts that are part of a bankruptcy case, but only when a waiting time has passed.

You are eligible to file for bankruptcy at any moment, provided that none of the following events have occurred within the preceding 180 days:

  • Your lawsuit was dropped for disobeying court directions.
  • Your case was dropped since you didn't show up for your court date.
  • Case dismissed voluntarily.

Does Chapter 7 Allow for Multiple Filings?

In Chapter 7, often known as liquidation bankruptcy, the debtor sells assets to satisfy a portion of their debts. Wait eight years after your previous bankruptcy case was discharged or closed before filing a Chapter 7 case again.

Chapter 11 bankruptcy is often used by corporations, although individuals can also apply to reorganize their finances. If you've already filed for Chapter 13 bankruptcy and are hoping to switch to Chapter 7, the rules are more intricate.

  • If all debts were settled in a previous Chapter 13 bankruptcy, there is no time requirement before filing for Chapter 7.
  • No waiting time for Chapter 7 if 70% of creditors' claims were satisfied in the preceding Chapter 13 case and the repayment plan was a "good faith" proposal representing the filer's "best effort." To satisfy your debts in a "best effort" manner, you should spend every last cent on them.
  • Chapter 7 can be filed six years after a Chapter 13 case if fewer than 70% of claims were not paid.

What Is The Chapter 13 Repetition Limit?

It is possible to settle part or all of one's obligations over three to five years in Chapter 13, often known as a wage earner's plan. Chapter 13 bankruptcy can be filed by four years after a previous Chapter 7 bankruptcy was filed, but in most cases, the wait is longer. In contrast, the waiting time is often reduced to two years from the date of the prior bankruptcy filing if Chapter 13 bankruptcy was previously filed.

Is There a Limit to How Many Times One May Declare Bankruptcy?

There is no limit to the number of times you can file for bankruptcy, although there is usually a waiting period between Chapter 7 and Chapter 13 filings. You may technically declare bankruptcy many times, but each time might further harm your credit score.

There is a seven-year time limit on having a Chapter 13 bankruptcy appear on your credit record after it has been filed, and a 10-year time limit on having a Chapter 7 bankruptcy appear.

Credit Reports and Multiple Applications

They'll show on your credit record for several years if you've filed for at least two bankruptcies. They may occur simultaneously, impacting your credit record in the same way. Bankruptcy cases, whether Chapter 7 or Chapter 13, can linger on your credit record for up to 10 and 7 years, respectively, after the discharge has been granted. Multiple bankruptcies can have the following effects on credit:

  • The elimination of an "automatic stay." The loss of an "automatic stay" is a possible consequence. When someone files for bankruptcy, an automatic stay goes into effect, which stops some creditors from seeking to collect a debt.
  • Poor credit. As long as one or both bankruptcies remain on your credit report, your score will remain low.
  • Trouble getting credit. Borrowing money for things like a house or a credit card will become more difficult.
  • Additional problems. It may make renting a home, getting hired, or obtaining insurance difficult.
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