Is Filing for Bankruptcy More Than Once in Your Life Allowed?
When debts become too great and there is little hope of paying them off, many people and businesses will turn to bankruptcy for a sound legal solution to the problem. For individuals, Chapter 7 and Chapter 13 are the two most commonly used forms of bankruptcy, with the former attempting to completely eliminate as much debt as possible and the latter reducing debt and setting up a repayment schedule. However, there is nothing about bankruptcy that guarantees financial security in the future; it merely helps control current financial troubles. If a person uses a successful bankruptcy filing once, can they ever file for bankruptcy again?
Legal Limits on Consecutive Bankruptcy Filings
The short answer is ‘yes,’ an individual can file for bankruptcy more than once in his or her lifetime. But the full answer is ‘yes, with limitations.’ Bankruptcy law that applies to all states will only allow a successive bankruptcy filing if a certain amount of years has transpired since the last case filed by that individual or organization.
The time limits between bankruptcies vary depending on what type of bankruptcy was previously used and what type is sought later:
- Chapter 7 to Chapter 7: Time limit of 8 years
- Chapter 13 to Chapter 13: Time limit of 2 years
- Chapter 7 to Chapter 13: Time limit of 4 years
- Chapter 13 to Chapter 7: Time limit of 6 years
The last situation – Chapter 13 to Chapter 7 – does have an exception that could completely eliminate the time limit of 6 years. If you pay the entirety of the debt to unsecured creditors through your Chapter 13 bankruptcy repayment plan, or you pay 70% of all debts in your Chapter 13 bankruptcy and exercised good faith to pay as much as possible, a bankruptcy court judge could dispel the 6 year time limit and allow you to file for Chapter 7 at that time.
Additionally, if your previous attempt to secure a bankruptcy debt discharge was dismissed or otherwise unsuccessful, the limitation to refile will most likely be just 180 days, or 6 months. The court is allowed to exercise some discretion in this regard, though. It could be lessened if you want to attempt to file for a different type of bankruptcy, or it could be extended if your bankruptcy filing was thrown out by the court due to fraudulent behavior.
What Bankruptcy Filing is Right for You the Second Time Around?
When you need to file for bankruptcy a second, third, or possibly even fourth time, it can feel disheartening. How are you to know what process will be the best for your situation if you have not had the best of financial luck in the past? Albaugh Law Firm and our St. Augustine bankruptcy attorneys are here to take the guesswork out of your bankruptcy filing and help guide you towards a secure, stable, and comfortable future once and for all.
Our goal from the beginning of your case to the final moments will be doing whatever it takes to help you enjoy fiscal freedom after a bankruptcy filing. We take the time to get to know all of our clients personally and fully analyze their financial situation, which enables us to confidently choose the bankruptcy process that will work for them, even when it is not the first time they have filed.