If you’ve filed bankruptcy before, you know how it helps you when you become overwhelmed with debt. The automatic stay stops any efforts from collection agencies and debt collectors to get you to repay the debt and the bankruptcy discharge erases your obligations to repay them.
Now, this pandemic may have put you in another financially tough situation. You find yourself dealing with wage garnishment and collection calls from all your medical debt, tax debt, student loan debt, credit card debt, among others. If this is you, you can ask the bankruptcy court for bankruptcy protection for another time.
In this article, we’ll discuss how many times you can file for bankruptcy, as well as the qualifications and limitations you’ll face if you decide to file again, according to bankruptcy laws. If you have any clarifications, it’s best to ask an experienced Phoenix bankruptcy attorney to address your bankruptcy case.
Before we discuss the number of times it’s possible to file for bankruptcy, we’ll give you a brief overview of the different types of bankruptcy you can typically file under the US bankruptcy code.
A Chapter 7 bankruptcy is also known as liquidation bankruptcy. For this chapter, a trustee takes your assets and sells them to repay your creditors.
A Chapter 13 bankruptcy is a reorganization bankruptcy. This is your choice if you want to keep your car from repossession or save your home from foreclosure. You propose a repayment plan which usually takes 3-5 years. This gives you breathing room to repay the debt owed as well as discharge some of the debts after bankruptcy.
What’s the Limit on Declaring Bankruptcy?
You can declare bankruptcy as much as time allows. The issue is time. The Bankruptcy Code requires that some time has passed after the previous bankruptcy discharge so you can file another bankruptcy petition. This is abuse prevention of the bankruptcy process as people can just take lots of credit than just file bankruptcy to eliminate their debt.
Time Limits between Filing for Bankruptcy
Below we’ll list down the time requirement for filing bankruptcy, depending on the chapter of the prior filing and the planned one.
Chapter 13 to Chapter 13
Two (2) Years
Chapter 13 filings are typically used to reorganize non-dischargeable debts to make them more manageable. As such, the time between repeat Chapter 13 filings is not as important.
Do take note that two years is uncommon, as Chapter 13 repayment plans last a minimum of three years. This usually only happens in extreme circumstances that make completing the plan impossible.
Chapter 13 to Chapter 7
Six (6) Years
Since Chapter 13 repayment plans take 3-5 years, you may only have to wait for 1 year after your debts are discharged to file for a Chapter 7 bankruptcy. It’s also possible to have the period waived if you manage to pay all your debt in your plan.
Chapter 7 to Chapter 13
Four (4) Years
You can still file your Chapter 13 petition after your Chapter 7 discharge. It’s just that you can’t get another discharge from the second filing.
A useful tactic is to file a Chapter 13 bankruptcy to pay off the debts that weren’t able to be discharged. Dischargeable debts are usually unsecured debts.
Chapter 7 to Chapter 7
Eight (8) Years
Chapter 7 gives the debtor the quickest debt relief from a bankruptcy filing. To prevent abuse, it also has the longest wait period between filings.
The bankruptcy law does not have a limit on the number of times you can file for bankruptcy. It does need you to wait for some amount of time after a previous filing before you can petition for another, depending on the bankruptcy chapter of both the previous filing and the planned one.
Bankruptcy proceedings can be complicated. However, it offers one of the best ways to gain relief from all your debt and get another chance at a secure financial future! Our reliable bankruptcy attorneys at Phoenix Fresh Start Bankruptcy Attorneys can help you with all the paperwork and processes to ensure you can be debt-free. We also offer a free Credit Rebuilding service so that you can maintain a great score even after bankruptcy!
What are you waiting for? Call our Phoenix bankruptcy law firm now to schedule a free consultation and get your fresh start!