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Definitive Guide on How Often You Can Do Bankruptcy & Years to Wait
How often can you file bankruptcy? How many years do you have to wait between filing bankruptcy cases? Is there a limit? It’s not straightforward, and it depends on a couple of factors. Here we take a look at how often you can file bankruptcy, and if you have to wait before filing again.
And what makes this different from all the other “how often can you file bankruptcy” websites is that we’ll include cites to the Bankruptcy Code so you can go check them out for yourself.
Let’s get started.
How many times can someone file bankruptcy?
First, is there a limit to how many times someone can file bankruptcy in their life? The answer, simply, is “no.” Someone can file bankruptcy as many times in their life as they need to, assuming they wait the required time between filings.
Practically speaking, the United States Trustee and Department of Justice gets a little bit interested if they see a pattern and are suspicious of abuse of the process.
The DOJ and courts clamp down on what we call serial filers, which is generally not a good thing to be. A serial filer is someone who has, for example, filed bankruptcy 6 times in the last three years. The thinking is there’s concern they are filing and getting dismissed and re-filing just to use (or abuse) the automatic stay bankruptcy protection. This never ends well.
Another example of a serial filer is someone who files a personal bankruptcy five times in their life, waiting the right number of years between each one. At some point, it may start looking like a preplanned scheme. This can get government scrutiny.
However, the serial filer is the outlier. I’ve been doing this for over 20 years, and I rarely see them. I’ll assume you’re not a serial filer. You’re the honest but unfortunate person the bankruptcy system was designed to help. You are allowed to file again. But you have to wait some time.
So, how often can someone file bankruptcy?
How often you can file – how long do you have to wait between bankruptcy cases – like most things in law, is it depends.
One thing it depends on which chapter the first case was, and what chapter is needed to file now.
So, as you might guess, there is more time needed between two Chapter 7 bankruptcies than between two Chapter 13 cases. Let’s now drill down and take a look at the specifics.
How often can I file Chapter 7 bankruptcy (ie: time between two Chapter 7 cases)?
If the first case was a Chapter 7 discharge, and you want to file another Chapter 7 bankruptcy, you have to wait 8 years. 11 USC 727(a)(8).
Chapter 7 is a powerful “get out of jail free” card, so after the first one, you can’t just turn around and file again.
I can’t wait and need to file now
There may be another solution. You can file a Chapter 13 sooner after a Chapter 7.
How many years do I have to wait between Chapter 7 and Chapter 13?
Sometimes, you just can’t wait eight years to file Chapter 7 again, especially if there’s a wage garnishment or foreclosure. If the first case was a Chapter 7 discharge, you only have to wait 4 years to file a Chapter 13. 11 USC 1328(f)(1).
That’s the good news.
But the key for Chapter 13 is having the ability to repay a portion of your debt. You’ll want to meet with a bankruptcy attorney to determine the floor and minimum your payment needs to be.
How much time is needed between two Chapter 13 bankruptcy filings?
If the first case was a Chapter 13 discharge, the good news is you only need to wait two (2) years to file Chapter 13 again. The logic makes sense, if you think of it. Chapter 13 takes time and dedication. If someone went through the process of earning a Chapter 13 discharge, they shouldn’t have to wait long to do it again. See 11 USC 1328(f)(2).
How much time do I have to wait between a Chapter 13 and a Chapter 7?
If the first case was a Chapter 13 discharge, you have to wait 6 years to file Chapter 7 bankruptcy.
Exception: However, there’s an exception to this rule, and there are certain requirements, which if met, mean that you can skip the wait. 11 USC 727(a)(9).
Someone doesn’t have to wait to file a Chapter 7 if, in the earlier Chapter 13, they repaid either 100% of the unsecured claims, or at least 70% of the unsecured creditors and the plan was proposed in good faith and was debtor’s best effort.
2… 4… 6… 8… who do we appreciate? Congress!
The easy way to remember all this is the silly sports chant above. Maybe you don’t really appreciate Congress, but it did make it simple to keep in mind how much time is needed between bankruptcy filings. See our handy How Often Can I File Bankruptcy chart below.
The two years and eight years are easy to remember (two 13s and two 7s, respectively). Harder to commit to memory are the four and six years. Which is which?
How Often Can I File Bankruptcy chart
|Plan to File Chapter 7||Plan to File Chapter 7|
|First case Chapter 7||8 years||4 years|
|First case Chapter 13||6 years if req not met||2 years|
How is the eight years (or whichever) measured? From Discharge?
For between bankruptcy cases, is it from discharge to filing date? Filing date to filing date? The answer is simple and consistent across all four scenarios: it’s from filing date to filing date.
For example, Section 727(a)(8) refers to “a case commenced within 8 years before the date of the filing of the petition.” A case is commenced when it’s filed with the court. Section 1328 is even clearer, as it uses that exact language: “…in a case filed…”
The time between bankruptcy cases is always measured from petition filing date to filing date.
What is the effect of discharge in the first case? Does it matter?
Yes, it does matter. Earlier I said the answer to “how many years between bankruptcy cases” depends. It also depends on the discharge in the first case. All the relevant statutes refer to the conditional “if a debtor has received a discharge…” or “…the debtor has been granted a discharge…”
In other words, if the first case got kicked out or dismissed, the above time needed between bankruptcy cases doesn’t come into play. All of this only matters if the first case resulted successfully, with a discharge.
But note: there are other factors that come into play if the first case got dismissed, like waiting 180 days due to Section 109, and other considerations. See a bankruptcy attorney near you for more details on your specific case.
Or if you’re near me anywhere in Los Angeles County, Orange or Ventura counties, let’s chat.
Thanks for reading.