Some people find themselves in the challenging position of facing renewed financial difficulties soon after emerging from bankruptcy. If you are considering filing for a second time, you may want to learn about the rules that govern repeat filings. The requirements differ depending on whether you are filing under the same chapter or a different chapter from before.
Technically, you can file for bankruptcy at any point, no matter how recently you filed previously. The reality is that timing does affect whether you can have your debts discharged in a repeat filing. Most debtors would not want to file unless they can have their debts discharged, although there are some exceptions.
Filing Under the Same Chapter
If you previously filed for bankruptcy under Chapter 7, you will need to wait eight years after you filed to seek another discharge under Chapter 7. If you previously filed under Chapter 13, you will need to wait two years after you filed to file for another discharge under Chapter 13.
Filing Under a Different Chapter
If you filed under Chapter 7 previously, you can seek a discharge under Chapter 13 four years after the Chapter 7 filing. If you filed under Chapter 13 previously, you can seek a discharge under Chapter 7 six years after the Chapter 13 filing in most cases. There are certain exceptions to the latter rule, including situations in which a debtor paid off their unsecured debts entirely in the previous Chapter 13 proceeding. They also may be able to file their Chapter 7 case sooner if they can prove that they proposed their plan in good faith, made their best effort to keep up with it, and paid at least 70 percent of the claims under the Chapter 13 repayment plan.
Filing Without Receiving a Discharge in the First Case
A debtor generally can file a second bankruptcy at any time if they did not receive a discharge in the first bankruptcy case. However, if you file two cases close together, the automatic stay may not apply to prevent creditors from collecting on your debts.
Some nuances may vary depending on whether the first case was dismissed or denied. If the case was dismissed, you can file again immediately except in some situations in which a 180-day waiting period applies. This may apply if you voluntarily dismissed the case after a creditor sought to lift the automatic stay, or if you did not follow court orders or appear in court when required. If the discharge was denied, you probably cannot get a discharge of the debts that you listed in that case if you file again.
Filing Without Seeking a Discharge
In a few cases, a debtor may want to file for bankruptcy to extend the time in which they can pay off the debt. A repeat filing under Chapter 13 may be useful in these cases because it can spread the payments on the debt across the three to five years of the repayment plan. A debtor also may want to file under Chapter 13 immediately after getting a discharge under Chapter 7. This is often known as “Chapter 20” bankruptcy.
A Chapter 20 bankruptcy may help debtors who have a substantial amount of debt but want the benefits of the repayment plan under Chapter 13, which allows them to pay off debts over time. Filing under Chapter 7 can help you trim your overall debt to be more manageable so that you can qualify for Chapter 13 and have a better chance of paying off your remaining debts efficiently. Even though the ensuing Chapter 13 case will not result in a discharge, it will allow you to catch up on substantial debts related to important assets, such as your home or car. It also can help you pay off debts that are not dischargeable. In some situations, a debtor can strip off second or subsequent mortgages through Chapter 20 as well.