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Just as there are different types of bankruptcy, there are different rules for how often you can file for bankruptcy. The waiting time for filing further bankruptcy proceedings is usually two to eight years, depending on the type of bankruptcy. In some situations, there may not be a waiting period.
This guide focuses on Chapter 7 and Chapter 13 bankruptcies, the most common types for individuals. Other types of bankruptcies – Chapters 9, 11, 12 and 15 – focus on municipalities, corporations, family farms and fishermen, and bankruptcy filings that affect more than one country.
Details on how many times you can file for bankruptcy can be difficult to navigate. If you’re an individual looking to find out if you can file for bankruptcy again, this guide can help point you in the right direction.
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How often can you file for bankruptcy?
How often you can file for bankruptcy depends on the type of bankruptcy. For example, the waiting periods for Chapter 7 and Chapter 13, two common types of bankruptcy for individuals, are different (see below for details on these two chapters).
However, waiting periods only apply if your debts were successfully settled in the previous bankruptcy proceedings – a bankruptcy exemption relieves you of responsibility for debts contained in a bankruptcy proceedings. This means you don’t have to wait to apply if your case is dismissed and your debt is not paid. In this situation, you can file for bankruptcy at any time, as long as none of the following has occurred in the last 180 days:
- You disobeyed court orders and your case was dismissed.
- You failed to appear in court and your case was dismissed.
- You have obtained a voluntary dismissal of the case.
How many times can you submit for Chapter 7?
Chapter 7, also known as liquidation bankruptcy, involves liquidating certain of the debtor’s assets and selling them to creditors.
If your previous bankruptcy case was Chapter 7 or Chapter 11 and you wish to file a new Chapter 7 case, you must wait at least eight years after the previous bankruptcy filing was filed. Individuals can also apply for a Chapter 11 financial reorganization, but this is typically a bankruptcy option used by corporations.
The guidelines are more complicated if your previous bankruptcy case was Chapter 13 and you want to file a Chapter 7 case:
- There is no waiting period for Chapter 7 if all claims of creditors in the previous Chapter 13 case have been settled.
- There is no waiting period for Chapter 7 if 70% of the creditors’ claims in the previous Chapter 13 case have been settled and the Chapter 13 repayment schedule was a “good faith” proposal representing the applicant’s “best effort”. To the best of your ability means you must use at least all of your disposable income (income after living expenses and mandatory payments) to pay creditors.
- There is a six-year waiting period for Chapter 7 after the previous Chapter 13 case if less than 70% (and up to 100%) of the claims in the previous Chapter 13 case are unpaid.
How many times can you submit for Chapter 13?
Chapter 13, often referred to as the wage earner plan, allows a debtor to pay off some or all of their debt under a court-approved plan that lasts three to five years.
If your previous bankruptcy case was Chapter 7 and you want to file for Chapter 13 bankruptcy, you typically have to wait at least four years after the Chapter 7 bankruptcy filing is filed. However, if your previous bankruptcy case was Chapter 13 and you wish to file another Chapter 13 bankruptcy case, the waiting time is typically reduced to two years from the date the previous bankruptcy case was filed.
How often can you file for bankruptcy?
Although there is often a waiting period to file another Chapter 7 or Chapter 13 bankruptcy case, there is no limit to the number of times you can file.
But while you can file for bankruptcy more than once, remember that doing so could prolong the damage to your credit score. A Chapter 7 bankruptcy may remain on your credit report for 10 years from the time the case was filed, and a Chapter 13 bankruptcy may appear on your credit report seven years after the case was filed.
Duplicate Filing (Chapter 20 Bankruptcy)
Double filing, informally referred to as Chapter 20 bankruptcy, refers to the filing of a Chapter 13 proceeding immediately after the conclusion of a Chapter 7 proceeding. Chapter 20 is not an official part of US bankruptcy law. Instead it is colloquial for double filing (7 + 13 = 20). Filing a Chapter 13 case after a Chapter 7 case has advantages and disadvantages.
The main advantage of chapter 20 is that you can pay off more debt over time than if you just followed chapter 7 or chapter 13.
Chapter 7 bankruptcy allows you to get rid of unsecured debts like credit card bills and medical bills. In the meantime, Chapter 13 lets you set up a three- or five-year repayment schedule for at least some of your secured and unsecured debt.
Filing Chapter 7 first allows you to reduce your debt so that it falls below the Chapter 13 debt limits. Filing Chapter 13 after completing a Chapter 7 case may give you more time to catch up on overdue debt, such as mortgage and car payments.
Here is a summary of the benefits of dual submission:
- It may allow you to pay off more debt over time.
- It may allow you to reduce debt under Chapter 7 first to qualify for Chapter 13.
- This gives you more time to catch up on overdue debts.
Here are some of the disadvantages of double filing:
- You will still not be able to pay certain debts, such as alimony and child support and some tax bills.
- You have to wait four years before filing Chapter 13 to get full debt relief in Chapter 7.
- You must prove to the court that you are acting in good faith by following chapter 13 to chapter 7.
- Filing both types of bankruptcy will prolong the hassle of getting your finances in shape.
Strategy to use in a second submission
If you’re thinking about filing a second bankruptcy, it’s important to develop a plan to make the process as smooth as possible. Here are five steps to consider:
- Decide if there is an alternative to filing for bankruptcy again that will help you reduce your debt burden. Consider all of your debt relief options before filing for bankruptcy again.
- Find out what kind of bankruptcy you need to file for the second time when no other options are available.
- Find out about the consequences of a second bankruptcy, e.g. B. how this affects your creditworthiness or if you lose part of your wealth.
- Determine the waiting time between the first bankruptcy you filed and the second bankruptcy you want to file.
- Decide whether to file the second bankruptcy yourself or seek help from a lawyer.
Your credit report and multiple filings
If you’ve filed for at least two bankruptcies, they’ll appear on your credit report for several years. They could even overlap, meaning both bankruptcies will show up on your credit report. A closed Chapter 7 case can stay on your credit report for up to 10 years, and a closed Chapter 13 case can stay on your credit report for up to seven years.
Here are some potential credit consequences of multiple bankruptcy filings:
- The loss of an “automatic stay”. This could lead to the loss of the so-called “automatic stay”. An automatic stay prevents certain creditors from attempting to collect debts from a trustee.
- A lower credit rating. It will keep your credit score low as long as either bankruptcy or both bankruptcies show up on your credit report.
- difficulties in obtaining credit. This will likely make it harder to qualify for a loan like a mortgage or credit card.
- Other problems. It can cause problems when trying to rent an apartment, find a job, or get insurance.
Other debt relief options
Bankruptcy is considered the last resort when it comes to debt relief. Fortunately, there are alternatives. They include:
- Seek help from a consumer credit advisor. A consumer credit counselor can develop a debt management plan aimed at eliminating some or all of your debt. In many cases, consumer credit counseling is provided by non-profit organizations.
- Taking out a debt consolidation loan. The goals here are to consolidate multiple debts into a single monthly payment and cut higher-interest-bearing debt.
- Contacting a debt settlement company. For-profit companies usually offer debt-repayment programs. These programs can help you reduce your debt by negotiating with your creditors. However, debt-repayment programs come with risks and are usually a last resort.
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You can file for bankruptcy more than once, but there is usually a waiting period between filing for bankruptcy. How long you have to wait depends on the type of bankruptcy you previously filed and your plan for filing the next one.
Frequently Asked Questions (FAQs)
Can I file for bankruptcy more than once?
Yes, you can file for bankruptcy multiple times. However, you may find that a bankruptcy court imposes time restrictions on entering multiple filing territory.
Is there a waiting period between bankruptcy cases?
In many cases there is a waiting period. Depending on the type of bankruptcy, you may have to wait at least two years after completing a bankruptcy proceeding before filing a new application.
What are the most common types of bankruptcy for private individuals?
The most common types of bankruptcy for individuals are Chapter 7 and Chapter 13. Chapter 7 involves selling your assets and using the proceeds to pay down debt, while Chapter 13 places a debtor on a three- or five-year debt-repayment schedule.
How long does a bankruptcy stay on your credit report?
A Chapter 7 case will stay on your credit report for up to 10 years and a Chapter 13 case will stay on your credit report for up to seven years.