No, you must wait 8 years before filing a Chapter 7 bankruptcy again, but you can file a Chapter 13 after a Chapter 7. Debt is one of the reasons people even consider bankruptcy, even though student debt can often not be discharged.
Have you filed for bankruptcy before, received a discharge, and made better financial choices, but somehow along the way, became bankrupt again? Fortunately, there is no limit to how many times you can file for bankruptcy. You can file for bankruptcy as often as you need to. The Bankruptcy law understands that a financial crisis can sometimes lead to bankruptcy several times. Therefore, there is no law restricting the number of times you can file for bankruptcy.
While the bankruptcy law doesn’t restrict how often you can file for bankruptcy, the Bankruptcy code restricts how often you can be eligible for a bankruptcy discharge. So, if you re-file bankruptcy too soon, you might not qualify for a discharge. Although you might need to file bankruptcy without aiming at receiving a discharge, filing too soon might be a waste of money and time. Read on to understand more about bankruptcy discharge in multiple bankruptcy filings.
How Long Should I Wait to Be Eligible for a Bankruptcy Discharge?
If you previously filed for bankruptcy and received a discharge, it might take a while before you are eligible for a bankruptcy discharge again. How often you can get a debt discharge will depend on the Chapter of bankruptcy you filed and when you filed.
When filing for bankruptcy, the main consideration is how recent your latest discharge was. There is a time range that may prevent you from filing bankruptcy again within a given time range. There are other numerous considerations that can be complicated to understand. You can use an online Chapter 13 bankruptcy calculator to estimate how long you should wait to be eligible to file and receive a bankruptcy discharge.
Understanding Bankruptcy Discharge: What is It?
The sole purpose of filing bankruptcy under Chapter 7 or 13 is to get rid of the debt you can no longer repay. The court can order a bankruptcy discharge at the end of your filing. A bankruptcy discharge is an order that legally relieves you of the obligation to repay some debts. When the court orders a debt discharge, it prohibits your creditors from taking any action to collect the discharged debts. Many people potentially want to file Chapter 7 bankruptcy because the cost to file bankruptcy including the attorney fees may be lower.
Although most debts can be discharged, not all are dischargeable. Unsecured debts like personal loans, medical debts, old rent payments, credit card debts, and personal judgments are dischargeable. On the other hand, some debts like child support, most tax debts, the government owed debts, and alimony are not dischargeable.
A bankruptcy discharge will not eliminate a secured lien. For example, if you have a mortgage, you cannot discharge it through bankruptcy; instead, you can forfeit the property to fully repay the loan if you cannot make loan payments or if you wish to stop paying.
So, if you would like to file for bankruptcy and are not eligible for bankruptcy discharge depending on the time between your last and current finding, it may be a waste of time. Without receiving a bankruptcy discharge, you will be responsible for repaying your debts, even after filing bankruptcy relief.
Though rare, filing bankruptcy even without receiving discharge can be beneficial in some cases. For example, if you file a Chapter 13 after a Chapter 7 can give you more time to pay your undischarged debts. However, filing bankruptcy too soon can present some challenges. So, consult a reliable bankruptcy attorney before filing again.
What is The 2-4-6-8 Rule?
We have stated above that although you can file for bankruptcies multiple times, you might need to wait a while before filing to be eligible for a bankruptcy discharge. The waiting period will depend on the bankruptcy chapter you had filed and when you filed.
If you previously filed and received a discharge, the 2-4-6-8 rule will determine if you are eligible for another bankruptcy discharge. The rule states that you need to wait 2, 4, 6, or 8 years to qualify for a debt discharge after your previous discharge. Here is a breakdown of the rule to know which waiting period is relevant to your case;
- Two Years- if you would like to file a Chapter 13 after another Chapter 13 bankruptcy case, you will have to wait for two years to be eligible for a debt discharge
- Four Years- when filing a Chapter 13 case after previously filing Chapter 7, you will need to wait four years to be eligible for a discharge
- Six Years- if you had previously filed a Chapter 13 and would like to file a Chapter 7 bankruptcy case, you will wait for six years to be eligible for another discharge
- Eight Years- when filing another Chapter 7 case, you need to wait for eight years to qualify for another bankruptcy discharge
The time limit is calculated from the date you filed your previous bankruptcy case. So, the waiting period will begin from the date you filed the previous case to the date you filed the new bankruptcy case. It doesn’t run between the dates you received the discharge to the current filing date. So, you can file a Chapter 13 bankruptcy after Chapter 7 bankruptcy often, but that would be a good question for a bankruptcy attorney.
So, while your income may be lower than that is required from the bankruptcy Chapter 7 means test, you may still have to wait.
What If I Did Not Receive a Debt Discharge in My Previous Case?
If you had filed for bankruptcy before but did not receive a bankruptcy discharge, you might wait for a shorter duration before re-filing bankruptcy. For example, if your previous bankruptcy case was dismissed, you can file again and qualify for bankruptcy discharge in 180 days. However, in this case, the waiting period will depend on why you didn’t get a discharge. If you didn’t receive a discharge because the court denied it, you might not get a discharge of the dame debts even if you re-file for bankruptcy.
So, if the court denied your bankruptcy relief filing, or discharged your case, consult an attorney before filing again. Each bankruptcy case is unique, and sometimes, exceptional circumstances influence the time limits between bankruptcy discharges.
Consider Other Debt-Relief Options Before Consulting an Attorney
If you had filed bankruptcy before and received a discharge, it might be tempting to re-file bankruptcy again when experiencing another financial crisis. You can also look at bankruptcy alternatives. However, other debt-relief options could be better than waiting for years to be eligible for a bankruptcy discharge.
You can use an online Chapter 13 calculator to compare your debt relief options before consulting an attorney on whether you should re-file for bankruptcy.
