Can I file bankruptcy again?

By Richard K. Gustafson

Unfortunately, relief from financial hardship is occasionally short-lived. It is not uncommon for some people to find themselves in more financial problems at some point after they filed a bankruptcy. It is possible to file bankruptcy more than once. However, there are time limits.

One part of the bankruptcy reform legislation that happened in October, 2005, was that time limits between bankruptcy filings were increased in some instances. The new time limits are as follows:

Chapter 7
- If you filed and received a discharge in a prior chapter 7 case, you have to wait 8 years after the filing of the prior chapter 7 before you can file another chapter 7 case.
- If you filed and received a discharge in a prior chapter 13 case, then the time limit depends on what percentage of your unsecured debt you repaid in your prior chapter 13. If you paid back more than 70% of your unsecured creditors (and that was your best efforts) in the chapter 13, you can immediately file a chapter 7 case without any waiting period. If your chapter 13 case paid less than 70% to the unsecured creditors, you have to wait 6 years after the filing of the prior chapter 13 before you can file a chapter 7.

Chapter 13
- If you filed and received a discharge in a prior chapter 7 case, you are eligible to file a chapter 13 case. There is no waiting period. However, if you file the chapter 13 case within 4 years of the date you filed the prior chapter 7, you will not receive a discharge in the chapter 13. Thus, you could use the chapter 13 to catch up on mortgage arrears and save your house, but the chapter 13 won’t ultimately discharge any debt obligation, including credit cards.
- If you filed and received a discharge in a prior chapter 13 case, there is a 2 year waiting period from the filing of the prior chapter 13 case. This provision would probably not come into play much because most chapter 13 repayment plans take longer than 2 years to complete. Thus, since the time period looks at the filing date, it would be rare that someone would complete a chapter 13 case within 2 years and then immediately need another one. It’s possible, but it would be rare.