Can You File Bankruptcy Twice?
It’s legal to file as many bankruptcy cases as necessary, but there are rules about how often you can file. The U.S. Bankruptcy Code regulates multiple case filings, how long a filer must wait, and other specifics that we’ll cover in detail below.
The mandatory waiting period between filings depends on several factors, including:
The result of your first bankruptcy case: If you received a bankruptcy discharge for your first case, the waiting period before you can file again is different than if your previous case was dismissed without discharge.
The type of bankruptcy you filed before: Individuals and families generally file either Chapter 7 or Chapter 13 bankruptcy. The time limits before you’re allowed to file again differ depending on the chapter of your previous filing.
The chapter of bankruptcy you file the second time: The waiting period between bankruptcy filings is affected by both the chapter of the previous bankruptcy and the chapter you plan to file in the subsequent case.
What’s the Mandatory Waiting Period Between a First and Second Bankruptcy Filing?
Under bankruptcy law, people can file for bankruptcy more than once to get the fresh start they deserve. The mandatory waiting period between bankruptcy cases depends on whether the first bankruptcy case was successfully discharged, whether your first bankruptcy case was a Chapter 7 (liquidation case) or a Chapter 13 (reorganization with repayment plan), and what chapter of bankruptcy your second filing will be.
Successful Discharge of First Bankruptcy Case
The two main types of personal bankruptcy are Chapter 7 and Chapter 13. Most individuals and families file Chapter 7 bankruptcy. This is the quickest form of bankruptcy. It’s also known as a liquidation bankruptcy, though the majority of filers get to keep most or all of their belongings.
It makes more sense for some people to file for Chapter 13 bankruptcy. Under Chapter 13, your debts are reorganized and you pay on a repayment plan that lasts three to five years. This has benefits that Chapter 7 doesn’t.
Filers receive a bankruptcy discharge at the end of a successful Chapter 7 or Chapter 13 bankruptcy case. The discharge is a bankruptcy court order that erases certain debts and means lenders can’t ever legally attempt to collect on discharged debts again.
The following outlines when you can file bankruptcy again and be eligible for a second discharge. The clock starts ticking on the date you filed your first bankruptcy, not the date of discharge.
Filing Chapter 7 After Chapter 7
You must wait eight years between Chapter 7 bankruptcy cases. To receive a second discharge, you must wait eight years from the date you filed your first successful Chapter 7 case until you can file your second Chapter 7 case.
Filing Chapter 7 After Chapter 13
You must wait six years between filing a Chapter 13 case and filing a Chapter 7 case. This timeline starts on the date you filed your first successfully discharged Chapter 13 case. Once six years pass, you can file a second bankruptcy case under Chapter 7. The six-year waiting period can be waived if you paid all of your unsecured creditors in full during the initial Chapter 13 bankruptcy payment plan. Unsecured debts include credit card debt, medical bills, and other debts not secured or backed up by property.
Filing Chapter 13 After Filing Chapter 7
You must wait four years to file a Chapter 13 bankruptcy case after filing a Chapter 7 case. This four-year waiting period only applies if you’re hoping to receive a second discharge of debt in your second bankruptcy filing.
In some instances, it might make sense for a person to file a Chapter 13 bankruptcy after receiving a discharge in a Chapter 7 but before the four-year waiting period has passed. This is because Chapter 13 bankruptcy requires you to follow a payment plan to repay your debts. This can help you to catch up on missed payments.
As soon as you file bankruptcy, creditors must stop all collection activity against you because of the automatic stay. This means that filing for bankruptcy can stop a foreclosure, at least temporarily. A Chapter 7 bankruptcy can stop a foreclosure while a person is in bankruptcy, but if you want to keep your house you have to make your monthly payments and catch up on any missed payments.
A Chapter 13 bankruptcy includes a repayment plan that allows you to make up any missed mortgage payments over a three-to-five-year repayment plan. During this repayment plan, generally, your house can’t be foreclosed. This is why some people file Chapter 13 even though they’re not seeking to have their debts discharged. In this case, it wouldn’t be necessary to wait four years between filings.
Filing Chapter 13 After Chapter 13
You must wait two years between Chapter 13 bankruptcy cases. To receive a second discharge of debts in Chapter 13, you must wait two years from the filing date of your first successfully discharged Chapter 13 case until the filing date of your second Chapter 13 case.
All waiting periods between bankruptcy filings are calculated from the filing date of the first case, not the discharge date.
First Bankruptcy Case Not Discharged
There is a difference between a bankruptcy case that’s discharged and one that’s dismissed. If your first bankruptcy case was dismissed, you didn’t receive a discharge so you may be able to file a second bankruptcy case immediately. When a bankruptcy case is dismissed without a discharge, it means that none of the filer’s debts are erased and they’re still obligated to pay back their debts.
Bankruptcy cases can be dismissed if:
- You don’t appear at a required bankruptcy hearing, including the 341 meeting of creditors.
- You fail to file all necessary documents properly and on time or fail to pay required bankruptcy filing fees.
- You don’t pay the required Chapter 13 plan payments.
- You aren’t truthful in your bankruptcy filing.
Depending on the reasons your case was dismissed, you may be able to file for bankruptcy protection again right away or you may need to wait before filing again. Under the Bankruptcy Code, you must wait 180 days to re-file a bankruptcy case if your first case was dismissed by the bankruptcy court for not following the court’s orders or appearing before the court when required.
You may also need to wait 180 days before filing a second bankruptcy case if you asked for a voluntary dismissal of your first bankruptcy case after one of your creditors filed for relief from the automatic stay. This means that a creditor formally asked the court to let them continue collection activity against you even though you filed for bankruptcy protection.
When people file a second bankruptcy case after a first case is dismissed, the court will evaluate if the bankruptcy was filed in good faith. Good faith means that you’re not trying to take advantage of the bankruptcy process. For example, if your first case is dismissed for failure to pay the necessary filing fee, it’s generally okay for you to file a second case immediately as long as you pay all necessary fees in the second case.
Is It a Good Idea To File Bankruptcy a Second Time?
Filing for bankruptcy is a powerful debt relief tool. You’ll need to look at your financial situation to determine whether filing a second bankruptcy case is a good idea for you or not. Filing for bankruptcy will harm your credit score and negatively impact your credit report, at least in the short term. A Chapter 7 bankruptcy will stay on your credit report for 10 years from the filing date and a Chapter 13 bankruptcy for seven years.
While bankruptcy can harm your credit, not filing can also be harmful due to missed payments, outstanding debts, and lawsuits for unpaid debts. If you’re facing a second bankruptcy after many years have passed, it’s important to explore why you’re in this situation again. Then take steps to ensure your financial well-being moving forward.
In some cases, it’s a good strategic financial move to file a second bankruptcy after a successful discharge. For example, you may benefit from filing a Chapter 13 after a Chapter 7 discharge to set up a repayment plan to pay off past-due mortgage payments to save your house, catch up on child support arrears, or pay tax debts that were too new to be discharged in your Chapter 7 bankruptcy case. In the case of child support arrears or back taxes, filing a Chapter 13 second bankruptcy could help you avoid wage garnishment and stretch out your repayment plan over three to five years. There are many valid benefits to filing a second bankruptcy case.
Abusive Bankruptcy Filings
The bankruptcy court looks closely at cases that may be abusing the bankruptcy process. An abusive bankruptcy filing could be a Chapter 7 filer that fails the means test. It could also apply to cases where an individual is inappropriately using the bankruptcy process to avoid paying back a debt, avoid a creditor, or buy time in a collection action, such as a foreclosure or pending lawsuit for unpaid debt.
The court frowns upon people who abuse the bankruptcy process or who have no intention of following through with their bankruptcy case. People who file multiple cases are more heavily scrutinized by the bankruptcy courts. Repeat filers may lose some of the benefits of bankruptcy protection. For example, the court may deny their discharge or revoke the automatic stay, which stops collection activity.
If You’re Seeking a Second Financial Fresh Start, Get Professional Help
Filing bankruptcy can be complex — filing successive bankruptcies can be difficult, confusing, and financially dangerous if you don’t plan well. An experienced bankruptcy attorney can help guide you. Bankruptcy attorneys are well-versed in the pitfalls of bankruptcy and multiple filings, the advantages bankruptcy offers, and court requirements. Many bankruptcy lawyers offer free consultations.
Many people who are struggling with debt start their debt relief journey with credit counseling. Pre-bankruptcy credit counseling can help you evaluate all of your debt relief options, including bankruptcy, debt consolidation, debt settlement, and other debt management options that may be right for you. Debt relief solutions are never one-size-fits-all. You need to know what’s best for you given your financial situation.
Below is a summary of filing fees for bankruptcy, the price of required credit counseling, and if you qualify for fee waivers or installment payments.
You have to pay filing fees and expenses for credit and debt counseling when you file for bankruptcy. You may be eligible for a fee waiver or be able to pay in installments if you are unable to pay the filing fee.
You can find a summary of what needs to be paid, when, and how to be eligible for installment payments or a fee waiver in this article.
Bankruptcy Petition Fees: Chapter 7 and Chapter 13 Filing Fees
The total amount of fees you have to pay in order to file for bankruptcy is as follows, as of December 1, 2020:
For Chapter 7, $338
For Chapter 11, $1,738
Chapter 12: $278; Chapter 13: $313
Periodically, the bankruptcy court raises these fees. The U.S. Courts fee webpage has the most recent fees available.
Chapter 7: Installments and Waivers of Filing Fees
The filing fee is usually due at the time your bankruptcy petition is filed. There are two exclusions from Chapter 7 bankruptcy, though. Asking the court to waive the fee completely or allow you to pay it in installments is an option.
Application for Installments of the Chapter 7 Filing Fee
You file Form 103A Application for Individuals to Pay the Filing Fee in Installments to request permission from the court to pay your filing fee over time. You must indicate on the form that you are unable to pay the fee in full and that you will make no more than four payments within 120 days of the petition’s filing.
Request for Waiver of Chapter 7 Filing Fee
If the court waives the fee, you are not required to pay it. If you are eligible for a fee waiver, you
must be unable to make payments in installments and have an income that is less than 150% of the federal poverty threshold (official poverty line estimates are available from your bankruptcy court).
Fill out Form 103B, Application to Have the Chapter 7 Filing Fee Waived, and send it in to request a fee waiver. In many cases, the judge will approve the application without requiring you to appear in person, but you may still be required to appear in court so the judge can question you.
See how to make changes to bankruptcy forms.
In Chapter 13, there are no fee waivers or installment payments.
Fee waivers and installment payments are generally not available to Chapter 13 filers because they must have sufficient funds to support a repayment plan for three to five years following filing for bankruptcy. When submitting the case, budget for the cost.
Extra Fees Associated with Bankruptcy Filing
Credit counseling from an authorized provider must be completed no later than six months prior to filing for bankruptcy under Chapter 7 or Chapter 13. To get your bankruptcy discharge (the order that eliminates qualifying debt), you have to complete a debtor education course after filing your case.
For the necessary counseling, the majority of approved credit counseling providers charge $15 to $30, but you might not be required to pay anything. In accordance with the law, agencies must offer counseling regardless of your financial situation, so please inform the agency if this is not possible for you.
Additionally, the debtor education classes run about $35. You can request that the provider waive the fee or let you pay a smaller amount if you are unable to pay the full amount.
How to Pay Your Attorney Fees in Bankruptcy
Since many bankruptcy attorneys charge as little as $100 to begin, finding a way to pay Chapter 13 bankruptcy fees is not too difficult; the remaining amount can be rolled into your Chapter 13 repayment plan. You can pay your Chapter 13 fees gradually with this method.
You must pay your attorney in full before filing for Chapter 7 bankruptcy. For what reason? because legal fees are eliminated in Chapter 7 bankruptcy. Your attorney won’t get paid if you don’t make the entire payment.
To file for Chapter 7, how do you obtain the necessary funds? Most Chapter 7 filers divert their payments intended for bill cancellation during bankruptcy to pay their attorney. The funds will be borrowed by others from friends and relatives.
But there are other approaches. If you are unable to pay for a bankruptcy attorney, you can find out more information here about your options.