Even if you’ve filed a bankruptcy case before, you might again find yourself in a financial situation too difficult to manage on your own. And, although you’re not limited to one bankruptcy in your lifetime, there are restrictions on how often and when you can file.
Before filing for bankruptcy again, find out whether another bankruptcy will meet your needs and when multiple filings will get you in trouble with the court. In this article, you'll also learn when you'll qualify for a second bankruptcy "discharge," the order that eliminates qualifying debt, and whether you need a discharge at all.
Timing of Previous Bankruptcy Discharge
You can always file another bankruptcy case. However, if you’d like to receive a second discharge of your debts, you must wait until a fixed period elapses. The amount of time will depend on the type of bankruptcy you previously filed, the bankruptcy type you plan to file, whether your previous case was dismissed or discharged, and the filing date of the last case.
Here’s the timetable for receiving a discharge in a second bankruptcy case:
- Chapter 7 to Chapter 7. If you received a discharge of debts in your first case, you must wait eight years to file your second Chapter 7 case.
- Chapter 7 to Chapter 13. Four years must elapse before filing a Chapter 13 discharge case.
- Chapter 13 to Chapter 13. You must wait at least two years before filing another Chapter 13 matter.
- Chapter 13 to Chapter 7. A Chapter 7 case can be filed six years after the Chapter 13 filing. The six-year rule does not apply if you paid back all of your debt in the Chapter 13 case or you paid back 70% of your unsecured debt and proposed the plan in good faith (it was your best effort).
Evaluating a Second Bankruptcy Filing
Having previously filed for bankruptcy, you already understand your financial situation is unique. As before, when deciding whether bankruptcy will be beneficial, you’ll want to consider several issues, including the following:
- whether you have the type of debt that’s dischargeable
- the amount of property you can keep or potentially stand to lose
- the differences between Chapter 7 and Chapter 13 bankruptcy, and
- which bankruptcy chapter would be the best fit for you.
When a Second Bankruptcy Discharge Isn’t Needed
If your case isn’t a serial filing, you can file a case earlier than the rules allow if you don’t need to wipe out any debt. For instance, an individual with nondischargeable debt (debt that must be paid, such as support arrearages or most taxes) might want to propose a payment plan in a Chapter 13 bankruptcy.
Not only will the filer get to stretch out the debt payment over three to five years, but because the payment plan will be under the protection of the bankruptcy court, the debtor won’t need to worry about collection efforts like wage garnishments or bank levies.
Filing Bankruptcy After a Dismissal
If you've filed for bankruptcy before but didn't receive a discharge, your case was likely dismissed by the bankruptcy court. The reason your case was dismissed will determine when you can file again.
If you failed to file a document, appear at the 341 meeting of creditors, or didn't fulfill some other procedural requirement, your case was likely dismissed "without prejudice." You'll be free to file again immediately.
An example of conduct that can get you into trouble is filing multiple cases too close together. This serial filing practice will draw the court's attention and the Office of the United States Trustee. If an investigation leads the trustee or the court to conclude that you are abusing the bankruptcy process, the court can dismiss your case with prejudice, meaning that you’ll be prohibited from filing another bankruptcy case for a period.
Most dismissals are limited to 6 to 12 months, but the court can permanently prohibit you from filing another bankruptcy case in extreme circumstances.
Example. You filed a Chapter 13 case that the court dismissed after failing to file your schedules (bankruptcy paperwork). Immediately, you filed a second matter but stopped making payments after six months. After the court dismissed the second case, you filed a third bankruptcy. The trustee appointed to oversee the case filed a motion to dismiss it with prejudice, arguing that you were filing Chapter 13 cases to get protection from your creditors without real intention to pay your debts. The bankruptcy judge granted the trustee’s motion, dismissed your case, and prohibited you from filing another for a particular period.
Multiple Bankruptcy Filings and the Automatic Stay
Special rules shorten the length of the automatic stay—the order that prevents your creditors from collecting against you—when you file back-to-back bankruptcy cases or after a creditor wins a motion to lift the automatic stay in the previous case. If you are facing such a situation, speak with a bankruptcy attorney.