Living with overwhelming debt can make it difficult to cover even basic needs. Contrary to what some people believe, serious debt is not always the result of overspending. Medical bills, job loss, divorce and other unexpected hardships can leave someone unable to keep up with payments. Bankruptcy may provide a way to regain control of the situation.
Bankruptcy can eliminate or reorganize certain debts. Chapter 7 typically offers relief within a few months, while Chapter 13 allows a person to repay some of what they owe over three to five years. Although it is possible to file for bankruptcy more than once, the timing of a new case can affect whether the filer is eligible to receive another discharge.
How long must you wait to file again?
There is no limit to how many bankruptcy cases a person may file. However, the law does limit how often someone can file for and receive a bankruptcy discharge. The applicable waiting period generally depends on the chapter used in the previous case and the chapter being filed now.
The usual waiting periods are:
- Chapter 13 followed by Chapter 13: Two years
- Chapter 7 followed by Chapter 13: Four years
- Chapter 13 followed by Chapter 7: Six years
- Chapter 7 followed by Chapter 7: Eight years
These periods generally run from the filing date of the earlier bankruptcy case to the filing date of the new one. Because a Chapter 13 repayment plan usually lasts three to five years, someone who previously completed a Chapter 13 case may already have satisfied the two-year waiting period before filing another Chapter 13 case.
There may also be exceptions to the six-year waiting period between a Chapter 13 case and a Chapter 7 case. For example, the waiting period may not apply if the filer paid all unsecured creditors in full through the Chapter 13 plan. An exception may also apply if the filer paid at least 70% of those claims and proposed the plan in good faith.
Filing again before you qualify for a discharge
In some circumstances, a person may be able to file another bankruptcy case before becoming eligible for a new discharge. Doing so may still provide temporary protection from collection efforts or allow the filer to address secured debts through a Chapter 13 plan. However, the benefits may be limited, particularly if a previous case was dismissed.
Filing another bankruptcy can affect a family’s finances for years, so timing matters. Professional legal guidance can help someone determine whether enough time has passed, whether an exception applies and which type of bankruptcy may provide the best relief.