While you can file for bankruptcy as many times as you wish, receiving a discharge is another matter. So the question isn’t so much “how often can you file for bankruptcy?” but “how often can you file for bankruptcy and actually have your debts discharged?”
How often you can receive another bankruptcy discharge depends on several factors:
- The type of bankruptcy you filed,
- When you filed your prior bankruptcy, and
- The outcome of your case.
In this article, we will explain how often you can have your debts discharged in bankruptcy. For more information about filing for bankruptcy after discharge, contact the Law Office of Jack G. Lezman, PLLC today.
What Are the Benefits of Bankruptcy?
If you have previously filed for bankruptcy, you may already know its benefits. Bankruptcy can help if you are deep in debt by giving you a financial fresh start.
Bankruptcy provides a clean slate by paying your creditors at a discount and discharging your debt. This debt can be eliminated in two ways. First, through the sale of your non-exempt assets in a Chapter 7 bankruptcy. Or, through a three- to five-year repayment plan in a Chapter 13 bankruptcy.
Bankruptcy also stops creditor collections, wage garnishment, and lawsuits through a court-ordered injunction called an “automatic stay”. An automatic stay goes into effect once you file for bankruptcy, prohibiting most creditors collecting debt from you.
Time Limits to Receiving Another Bankruptcy Discharge
Financial misfortune can happen to you more than once. A failing body, marriage, or business could come out of nowhere, leaving you with unpaid bills after a bankruptcy discharge.
Bankruptcy is an option just as it was the first time you found yourself in financial trouble. However, you may need to wait to file for bankruptcy and have your debts discharged again.
The timing of a subsequent bankruptcy discharge depends on the answers to two questions:
1. What Bankruptcy Chapter Did You File Before and What Type Do You Want to File Now?
The wait time to get another bankruptcy discharge rests on whether your bankruptcies are filed under Chapter 7 or Chapter 13. Generally, you will wait less time to file for Chapter 13 after a prior bankruptcy discharge.
Filing for Chapter 13 after a Chapter 13 discharge requires you to wait two years from the day you filed. However, Chapter 13 repayment plans are often completed in three to five years before debts are discharged. So, you can file for Chapter 13 bankruptcy right after your first concludes.
If you file for Chapter 13 after a Chapter 7 discharge, your wait time is four years. You must wait four years after filing for Chapter 7 to file for Chapter 13.
Your wait times are longer if you want to file for Chapter 7 bankruptcy after a prior discharge. You must wait eight years if you file for Chapter 7 after a previous Chapter 7 discharge.
You can file for Chapter 7 six years after filing for Chapter 13 bankruptcy. However, if you repaid all unsecured debts in your Chapter 13 repayment plan, you can file for Chapter 7 immediately. The same applies when you pay 70% of the unsecured debts and make best efforts to stick with the plan.
2. What Was the Outcome of Your Prior Bankruptcy?
How soon you can file for bankruptcy again depends largely on the outcome of your prior bankruptcy case. If your debts were discharged and the court closed your case, nothing changes. You must wait two to eight years depending on the bankruptcy chapter you filed before and plan to file now.
If, on the other hand, your debts were not discharged and the court dismissed your case, different rules apply. If the bankruptcy court dismisses your case with prejudice, you may be prohibited from filing another bankruptcy for 180 days. A case is dismissed with prejudice when court orders are not followed or the bankruptcy rules are abused.
Bankruptcy fraud, such as not disclosing assets, lying, or acting in bad faith, has harsher consequences. The bankruptcy court could ban you from filing for bankruptcy for a long time or for life. If this happens, you would be unable to have your debts discharged indefinitely.
A court’s dismissal of your bankruptcy case could also cut short the term of your automatic stay. A dismissal that occurred within one year of filing bankruptcy can result in an automatic stay of just 30 days. Even more dismissals within one year of filing can strip you of any automatic stay at all.
A Charlotte NC Bankruptcy Attorney Can Help You File for Bankruptcy Again
If you are considering filing for bankruptcy again, an experienced Charlotte bankruptcy attorney can help. At The Law Office of Jack G. Lezman, PLLC, we can explain your options and help you assess your situation. Contact us today to learn more.