If you filed bankruptcy in the past, how soon before you can file again? And how often can you file for bankruptcy and receive a discharge?
While you can file bankruptcy as many times as you want, waiting periods will depend on what type of bankruptcy you filed previously, the timing of it, and how the case ended.
What If You Need to File Bankruptcy Again?
In filing for bankruptcy, the goal most people have in mind is to have their debts eliminated. Your debts get discharged at a discount, after you pay your creditors a portion. You sell nonexempt assets in a Chapter 7 bankruptcy or complete a repayment plan in a Chapter 13 bankruptcy.
But just as you didn’t plan on needing bankruptcy before, unexpected crises can strike at any time — and you could easily find yourself deep in debt again. Health problems, unemployment, divorce, or business failures could cause you to fall behind on your bills. Bankruptcy is still option, but you may need to wait to file and have your debts discharged.
What Factors Limit the Timing of Multiple Bankruptcy Filings?
How soon you can file bankruptcy after your debts are discharged in bankruptcy depends on two factors.
Did You File for Chapter 7 or Chapter 13 Bankruptcy?
Federal law sets the timing between a bankruptcy discharge and a subsequent bankruptcy filing. This timing is based on the type of bankruptcy for which you received a discharge and the type you now wish to file.
You will wait the longest if you file Chapter 7 bankruptcy following a Chapter 7 or 13 discharge. You must wait eight years if your debts were discharged under Chapter 7 and you file for Chapter 7 again. A gap of eight years must exist between the day your debts were discharged and the day you file again.
You must wait six years if you received a Chapter 13 discharge and want to file for Chapter 7. The gap of time between a Chapter 13 discharge and filing Chapter 7 must be a minimum of six years. You won’t need to wait six years if you paid the unsecured debts associated with your Chapter 13 repayment plan. The same applies if you paid 70% of your unsecured debts made your best effort to abide by the plan.
You won’t need to wait as long if you seek a Chapter 13 bankruptcy after receiving a bankruptcy discharge. You must wait four years between the day you received a Chapter 7 discharge and then file for Chapter 13. The wait is two years if you filed Chapter 13 and want to file for Chapter 13 again. Because Chapter 13 repayment plans last three or five years before discharge, you can file Chapter 13 again immediately after discharge. If you complete payments under your repayment plan before the three or five years, you can immediately refile another Chapter 13.
Did Your Previous Bankruptcy End in Dismissal?
How soon you can file for bankruptcy again is also limited by whether your prior bankruptcy ended in dismissal. If your previous bankruptcy was dismissed with prejudice, you’ll need to wait at least 180 days before you file again. Your case will be dismissed with prejudice if you don’t obey court orders, delay your case, or file multiple times.
If your prior bankruptcy was dismissed without prejudice, you might be able to immediately file for Chapter 7 or 13. It will not matter what Chapter bankruptcy you filed earlier.
A prior dismissal in a bankruptcy case will also result in a shorter automatic stay period. When you file bankruptcy, you receive an automatic stay that stops creditors from collecting against you for a period of time. If you file bankruptcy within one year of dismissal, the automatic stay associated with your new bankruptcy will only be 30 days. If two or more of your bankruptcy cases are dismissed within a year of filing, you will not receive an automatic stay.
How Often Can You File Bankruptcy? Ask an Omaha Bankruptcy Attorney
If you are considering filing for bankruptcy again, an experienced Omaha bankruptcy attorney can help. At Burke Smith Law, we can help you assess your situation and understand your options. Contact us today to learn more.