There is no limit to the number of times you can file for bankruptcy in your life. However, how soon you can file after your debts are discharged in bankruptcy is another matter. The timing of receiving another discharge depends on the type of bankruptcy filed, its timing, and how it was resolved. So the question is less “how often can you file for bankruptcy?” and more “how often can you get a bankruptcy discharge?”
In the following article, we will explore what the limits are to having your debts discharged in bankruptcy. To learn more about how soon you can file for bankruptcy after discharge, contact a North Charleston SC bankruptcy attorney at Steadman Law Firm, P.A. today.
What Is a Bankruptcy Discharge?
Starting fresh financially is the goal most people have in filing for bankruptcy. In personal bankruptcy cases, most debts are discharged after some amount is paid to creditors. This takes the form of proceeds from the sale of nonexempt assets (Chapter 7) or a repayment plan (Chapter 13). The discharge allows you to pay off your debt at a discount so you can move on.
However, medical issues, divorce, unemployment, or another unfortunate event could strike at any time, leaving you with insurmountable debt. Bankruptcy will remain an option. But, you’re limited in how soon you can file and receive another bankruptcy discharge.
How Soon After Bankruptcy Discharge Can You Receive Another?
The limits on the timing of an additional bankruptcy largely depends on two factors:
1. What Type of Bankruptcy Did You File?
How soon you can receive another bankruptcy discharge depends on whether you previously received a Chapter 7 or 13 discharge. Just as important is the type of bankruptcy you wish to file now.
The longest waits are associated with filing for Chapter 7 bankruptcy after a Chapter 7 or 13 discharge. If you received a Chapter 7 discharge and want to file for Chapter 7 again, an eight-year rule applies. That is, eight years must pass between the day you filed originally and the day you file again.
If you were granted a Chapter 13 discharge and want to file for Chapter 7, a six-year rule applies. You’ll have to wait six years from the day you filed for Chapter 13 before you file for Chapter 7. This rule doesn’t apply if you’ve paid all unsecured debts as part of your Chapter 13 repayment plan. It’s also lifted if you paid 70% of your unsecured debts and did your best to stick with your plan.
There are shorter wait times is you file for Chapter 13 bankruptcy after a Chapter 7 or 13 discharge. If you file for Chapter 13 bankruptcy following a Chapter 7 discharge, a four-year rule applies. You must wait four years after the date of your Chapter 7 filing to file for Chapter 13.
If you were granted a Chapter 13 discharge and wish to file for Chapter 13 again, a two-year rule applies. You will have to wait two years from the day you filed the first Chapter 13 case to file your next one. However, Chapter 13 repayment plans typically take three to five years to complete before discharge. So, this means you can file a second Chapter 13 immediately after your first is finalized.
2. Was Your Previous Bankruptcy Dismissed?
The timing of when you can file for bankruptcy again also depends on the outcome of your previous bankruptcy case. If the bankruptcy court discharged your debt and closed your case, the eight-, six-, four-, or two-year rule applies.
If the court took more drastic action, you could be severely limited in your ability to file for bankruptcy again. And if your prior bankruptcy was dismissed with prejudice, you will be prohibited from filing again for 180 days. Dismissal with prejudice usually occurs when you disobey court orders, delay creditors with multiple case filings, or abuse the system.
Dismissal also results in a shorter automatic stay period. Automatic stays are helpful to protect you from creditors during the bankruptcy process. One dismissal within one year of filing for bankruptcy again results in a 30 day automatic stay. Two or more dismissals within one year of filing again results in no automatic stay.
Talk to a North Charleston SC Bankruptcy Attorney to Learn More About Filing for Bankruptcy Again
If you filed for bankruptcy in the past and are considering filing again, an experienced North Charleston SC bankruptcy attorney can help. At Steadman Law Firm, P.A., we can help you determine the best time to file for bankruptcy following discharge. Contact us today to learn more.