How Often Can You File Bankruptcy | Patrick McBurney

How Often Can You File Bankruptcy?

Filing bankruptcy is a great way to discharge or restructure your debts. In addition to the debt relief, the automatic stay in bankruptcy law prevents creditors from collecting debts during this time. The bank has to put foreclosure on hold, and the repo man can’t take your car.

Bankruptcy law has certain limits on when you can file bankruptcy, and how often you can receive a bankruptcy discharge. It’s important to understand how these limitations work after you receive your discharge.

Chapter 7 and Chapter 13 cases work differently, so they have different rules. The amount of time between receiving a bankruptcy discharge depends on what type of bankruptcy you want to pursue.

Here’s what you need to know about how often you can file bankruptcy under Chapter 7 and Chapter 13.

How often can you file a Chapter 7 bankruptcy?

Chapter 7 bankruptcy is an excellent option for people with limited assets and income to discharge most of their unsecured debts. The bankruptcy code allows Chapter 7 filers to keep certain types of property. Everything else gets sold in a liquidation sale to pay off creditors. Most people keep the majority of their property in Chapter 7, because they simply don’t have enough assets.

There isn’t a limit to how many times you can file for Chapter 7. However, once you’ve received a Chapter 7 discharge, there’s an eight-year waiting period before you can receive another Chapter 7 discharge. If you’ve previously filed under Chapter 13 and received a discharge, you need to wait four years before filing for Chapter 7.

If your Chapter 7 case was dismissed because you didn’t follow an order from the bankruptcy court, you may have to wait 180 days to file again.

How often can you file a Chapter 13 bankruptcy?

Chapter 13 bankruptcy works a little differently than Chapter 7. In Chapter 13 cases, you pay a portion of your income each month to the bankruptcy trustee. They divide this money among your creditors to pay off your debts.

Chapter 13 cases last for three or five years. At the end of the repayment plan, most of the debts will be paid off or discharged. Some debts, like student loans, can’t be discharged.

With Chapter 13, many debts are entirely paid off during the repayment period. Others receive most of what was owed. Because of this, waiting periods for Chapter 13 are shorter.

If you’ve previously received a Chapter 13 discharge, you’ll need to wait two years before filing under Chapter 13 again. You’ll need to wait up to six years before filing a new Chapter 7 case. This period is shorter for people who have paid all, or most, of their debts in good faith during their previous Chapter 13 case.

Although Chapter 13 has some benefits over Chapter 7, including shorter waiting periods, not everyone qualifies for this type of bankruptcy. To be eligible for Chapter 13 bankruptcy, you need to earn a steady paycheck that will support paying back your creditors over the three or five-year repayment plan.

Contact an experienced bankruptcy attorney

Bankruptcy offers debt relief options, both in debt discharge and in protecting individuals from creditors. Even if you can’t receive a discharge because it’s been too soon since your last one, there are still good reasons to file a new case.

For help with your bankruptcy needs, including deciding to go through the process again, contact an experienced bankruptcy attorney today to set up a case consultation.

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