Can you file bankruptcy twice?

Yes, you can file for bankruptcy twice. The real question is how soon can you file a second bankruptcy? This depends on several factors including:

• How far did you get in your first bankruptcy? 

• What chapter did you file for originally?

• What chapter are you hoping to file this time?

• How much time has passed since you received a discharge?

Types of bankruptcy

To start, it’s good to know about the different types of consumer bankruptcy available to individuals and married couples, namely Chapter 7 and Chapter 13. Chapter 7 bankruptcy is what most people think of when they hear the word bankruptcy. It’s a liquidation where you are able to walk away from some (or all) of your debts and get a fresh start. Chapter 7 can be a good remedy if you have mostly unsecured debts, like credit cards and medical bills, since those can be discharged completely. 

Chapter 13 bankruptcy, by contrast, is a personal reorganization, where you enter into a payment plan for three to five years. People most often choose Chapter 13 over Chapter 7 if they are behind on a secured debt (like a house or car) that they want to keep and use the Chapter 13 plan to catch up those payments while paying their best effort to their unsecured creditors. 

In either chapter the goal of your bankruptcy is to receive an order of discharge. The discharge is a court order that actually relieves you of your obligation to pay the debts incurred before your bankruptcy case. There are plenty of circumstances where a bankruptcy case is dismissed before the order of discharge, which impacts the timing of any additional filings. 

Without bankruptcy discharge

If your first bankruptcy did not result in an order of discharge, in most circumstances you can file again right away. It’s possible that your first case was dismissed by the court. This could happen for any number of reasons, maybe not all the necessary documents were filed, or the filing fee wasn’t paid on time, or the filer didn’t show up to their meeting of creditors.  For Chapter 13 bankruptcies, cases can be dismissed for failure to make all the required plan payments. In any of these examples, chances are the bankruptcy was dismissed without prejudice, meaning you should be able to file again right away. 

If your case was dismissed because you failed to appear for a required hearing (other than the meeting of creditors) or ignored a court order, the court may order that any additional bankruptcy filings are barred for 180 days. There is another circumstance where this required waiting period may be ordered, which has to do with the automatic stay. The automatic stay is a benefit in bankruptcy that stops any collection effort, like a foreclosure or garnishment, in its tracks, as soon as you file your case. The stay remains in effect throughout your case unless a court order removes (or lifts) the stay, most often the result of a creditor filing a request (or motion) to do so. 

If you voluntarily dismissed the case after a creditor filed a motion for relief from the automatic stay, it is likely the court will impose a 6 month waiting period, since that suggests that you were not filing the case in good faith, but to avoid (or at least delay) a foreclosure or repossession. Filing multiple bankruptcies in a short time period can also impact the length of the automatic stay or whether it applies at all. Additionally, if the court denied your discharge in your previous case, you probably wouldn’t be able to get a discharge in the new case. You can always consult a bankruptcy attorney, most of whom offer a free consultation, to determine if there are any restrictions on filing bankruptcy again.

After bankruptcy discharge

The rest of this article will focus on filing a second bankruptcy after you received a discharge in the first case. In that scenario, the time limits differ based on what chapter of bankruptcy you filed originally and what chapter you are looking to file for the second one. This waiting period for how often you can file bankruptcy is based on the timing of your filing date, not the discharge. 

Chapter 7 to Chapter 7 (8 years)

If you previously filed Chapter 7 and obtained a discharge, you can’t file a subsequent Chapter 7 until 8 years have passed since your original filing date.

Chapter 7 to Chapter 13 (4 years)

If you filed Chapter 7 the first time and are now looking to file Chapter 13, you need to wait 4 years from your original Chapter 7 filing date to file Chapter 13. Keep in mind, however, that the time limits are if you are hoping to receive a second discharge. You might decide to file a Chapter 13 after a previous Chapter 7 without the goal of discharge if you are now behind on a secured debt that you want to keep (like your house or car) and need the plan to catch up on payments. This filing sequence is sometimes  referred to as “Chapter 20.”

Chapter 13  to Chapter 13 (2 years)

If you filed a Chapter 13 and wish to file a second Chapter 13 you will need to wait 2 years from your previous Chapter 13 filing date to be able to get a discharge in the second case.

Chapter 13 to Chapter 7 (6 years)

If your previous bankruptcy was Chapter 13 and now would like to file Chapter 7 and be eligible for discharge you will need to wait for 6 years from your original filing date. If you paid your unsecured creditors 100% in your first Chapter 13, however, the waiting period can be waived. 

Conclusion

Just as there can be any number of reasons that you needed to file your first bankruptcy, there can be circumstances where it makes sense to file a second one. If you find yourself in a tough  financial situation after bankruptcy, the above time limits can help you determine when you can file for another one. You can also pursue other options for debt relief if you are not able to file bankruptcy again or would prefer to avoid it a second time.