How often can I file for bankruptcy?
As a lawyer I must have heard it a thousand times: “Anyone with a hundred bucks can file a lawsuit.” What most lawyers mean when they utter this phrase to each other is that anyone with enough money to pay the filing fee can file a lawsuit, even if they are not likely won’t win. My experience has been that this phrase is typically used when a lawsuit that the lawyers feel is unwinnable is being discussed.
Bankruptcy is similar in that as long as you can come up with the filing fee, and the restrictions discussed below do not apply (see below “Can I file for bankruptcy as many times as I want?), you are generally free to file. Just because you can file does not mean that you will “win.” In the case of bankruptcy, the “win” is usually obtaining a discharge of your debts. Discharge is the release of the debtor from any further liability for the debts that were eligible for discharge in the bankruptcy. Discharge occurs upon entry of the Court’s order granting the discharge. In other words, discharge is the part of the case where your eligible debts are wiped out and you no longer owe them. So the better question is not how often can I file, but is instead, how often can I get a discharge in bankruptcy? How frequently can I “win?”
The bankruptcy code places several time limits on discharge.
Time between two chapter 7 bankruptcies
If you filed a chapter 7 bankruptcy and were granted a discharge, you cannot file and expect to get another discharge for eight years. This eight year time period starts to run from the date of the filing of the earlier bankruptcy, not the date of the discharge.
Time between a Chapter 7 and a Chapter 13 is shorter
If your debts were discharged in a Chapter 7 bankruptcy, you can file a Chapter 13 four years after the date of filing the Chapter 7 and still get a discharge.
Time between a Chapter 13 and Chapter 7
If you received a discharge under Chapter 13 the time limit for filing a Chapter 7 and still being eligible to receive a discharge is six years. This time limit does not apply if you paid at least seventy percent of your unsecured debts in the prior Chapter 13 case.
Time between a Chapter 13 and another Chapter 13
If you received a discharge under a Chapter 13 you can file again within two years of the date of filing. Since Chapter 13 bankruptcies last between three and five years, this effectively means you can file again immediately after a Chapter 13 discharge and get another discharge after the newly filed plan is complete.
Are there times that someone may want to file even though the time limits prevent them from getting a discharge?
Yes. A debtor may want to file a Chapter 13 bankruptcy to help with debts that were not eligible for discharge in the prior Chapter 7 bankruptcy such as student loans or taxes. Doing so can offer protection from the collection actions of creditors while payments are made through the Chapter 13 plan on these difficult debts. This is sometimes referred to as a Chapter 20 bankruptcy and can sometimes provide more relief than filing a Chapter 7 alone.
Can I file as many times as I want?
The bankruptcy code is designed to prevent someone from repeatedly filing bankruptcy. Generally speaking, individuals are prevented from filing for bankruptcy protection if they have had a Chapter 7 or a Chapter 13 bankruptcy dismissed within the last 180 days because of either a violation of a court order in the prior bankruptcy or that individual requested the dismissal after a creditor asked for relief from the automatic stay. You may be wondering why someone might want to repeatedly file and then dismiss? The answer is typically that the filer is trying to get the protection of the automatic stay without following through on their responsibilities in the bankruptcy. While there may be narrow exceptions to this rule, this behavior is typically frowned upon by the bankruptcy Court for the Federal Circuit Mississippi is located in.
Do not despair
If you are dealing with financial stress and are concerned that you may not be able to file for bankruptcy protection because you have filed in the past, please contact me to discuss your specific situation. Even if you have concerns about the time limits, there is almost always be some type of bankruptcy relief available. To schedule an initial free and confidential consultation to discuss your particular situation call 601-853-9966.