Just because you had a need to declare bankruptcy in the past, doesn't mean that you won't encounter more bad financial luck in the future. You can declare bankruptcy as many times as you feel necessary, but the law does have something to say about how often you can do it. The timing of the filing depends on what type of bankruptcy you last filed, so read on to learn about these important time-lines.
The Two Major Types of Bankruptcy
- For consumers, there are really only two choices in bankruptcy (along with a third unofficial type). You will likely be filing either chapter 7 or chapter 13 bankruptcies.
- Many people utilize the debt-destroying power of a chapter 7 bankruptcy, and if that is the chapter you most recently filed and wish to file another chapter 7, you can do so after 8 years. That is 8 years from your discharge date, not from the initial filing date.
- Chapter 13 gives filers the opportunity to reorganize their debts and make extended payment plans to deal with those debts. If you most recent filed a chapter 13 and wish to do so again, you must wait at least 2 years from the date of your last chapter 13 full discharge date.
- If you want to switch chapters and file a chapter 13 after a chapter 7 bankruptcy, you can file a bit sooner than if you wanted to file another chapter 7. You can file after only 4 years from the chapter 7 discharge date in this instance.
- For the other way around, if you want to file a chapter 7 after your most recent chapter 13, you must wait 6 years from the final discharge of the chapter 13.
An Unofficial Bankruptcy Type
Most people have not heard about the chapter 20 bankruptcy, and that is because if doesn't really exist in the bankruptcy code. It is actually more of a method of filing that is aimed at tax debt, which can be considerable for some individuals in certain situations. A "chapter 20" filing consists of filing a chapter 13 as soon as possible after a chapter 7 discharge. While in most cases a filer would need to wait 6 years to file, you may file a modified bankruptcy that deals strictly with tax debt immediately after a chapter 7 discharge (Chapter 13 + chapter 7 = chapter 20).
To find out more about filing frequencies, talk to a bankruptcy lawyer.