How Many Times Can I File For Bankruptcy?
For most individuals, filing bankruptcy is a once in a lifetime event. However, some people experience more than one severe financial crisis in their lifetime that leaves them unable to pay their bills. Multiple financial hardships can result in the need for multiple bankruptcy filings, even for someone who has planned for financial emergencies.
There is nothing to be ashamed of if you need to file bankruptcy again. However, you need to understand the law regarding multiple bankruptcy filings so that you don’t waste your time and money filing bankruptcy cases what don’t result in a bankruptcy discharge.
Bankruptcy Filings vs. Bankruptcy Discharges
The law doesn’t prohibit filing multiple bankruptcy cases. In fact, you can file bankruptcy again immediately after your first bankruptcy case is closed. However, you will not be entitled to a bankruptcy discharge.
While the Bankruptcy Code does not limit the number of bankruptcy filings you may file within a certain period, it does limit the number of bankruptcy discharges you may have in a certain period. The ultimate goal of filing a bankruptcy case is to obtain a bankruptcy discharge. Without the discharge, there is no benefit in filing a bankruptcy case because you will still owe the debt when the case is closed.
Why Is a Bankruptcy Discharge Important?
The bankruptcy discharge releases you from the legal responsibility of repaying a debt. Creditors are barred from taking any action to collect a discharged debt. In other words, when a debt is discharged in bankruptcy, the debtor doesn’t have to repay any portion of the debt after the bankruptcy case is closed. If the creditor tries to collect the debt by filing a lawsuit, turning the debt over to a debt collector, calling the debtor, or sending letters demanding payment, the court can sanction the creditor for violating the discharge.
Because your goal in filing bankruptcy is to obtain a discharge, you want to make sure you wait the minimum time required by law between discharges prior to filing bankruptcy again. The minimum time required between bankruptcy discharges depends on the prior bankruptcy chapter and the chapter of bankruptcy you want to file now.
The 2-4-6-8 Rule is the best way to explain the time required between bankruptcy filings to be eligible for another bankruptcy discharge.
Two Years Between Bankruptcy Filings
To obtain another discharge when filing back-to-back Chapter 13 bankruptcy cases, you must wait two years from the filing date of the first Chapter 13 bankruptcy case to file another Chapter 13 petition.
Four Years Between Bankruptcy Filings
When filing a new Chapter 13 bankruptcy case after a previous Chapter 7 case, you must wait a minimum of four years from the date of the filing of the Chapter 7 to be eligible for a bankruptcy discharge under your new Chapter 13 case.
Six Years Between Bankruptcy Filings
If you want to file a new Chapter 7 case after filing a previous Chapter 13 case, you must wait at least six years from the filing date of the Chapter 13 case to obtain a bankruptcy discharge under your new case.
Eight Years Between Bankruptcy Filings
If you are filing back-to-back Chapter 7 bankruptcy cases, the minimum time you must wait between filing dates to be eligible for a discharge is eight years.
In some cases, you may be entitled to file another bankruptcy case sooner if your previous case was a Chapter 13 bankruptcy case and you paid your unsecured creditors 100% of their debts through the Chapter 13 plan. An experienced bankruptcy attorney should review your situation to ensure that your new case is filed in compliance with bankruptcy laws. Otherwise, you may not be eligible for a bankruptcy discharge in your new bankruptcy filing.