How Many Times Can Bankruptcy be Declared?

how many times can you file bankruptcy

A question people often have is what happens if they need to file bankruptcy more than once? Many people just assume declaring bankruptcy is a once-in-a-lifetime last resort action they can take only once. In reality, there is no legal limit to how many times you can file bankruptcy. There are, however, very strict rules around how often you can file that vary by the type of bankruptcy you file.

Bankruptcy 101: Differences Between Chapter 7 and Chapter 13 Cases

chapter 7 versus chapter 13

The two types of bankruptcy most individuals file for is either a Chapter 7 or a Chapter 13. A Chapter 7 bankruptcy is usually the best choice for people who have a lot of unsecured debt, such as credit card debt, personal loans, utility bills, medical bills, and so on that has become unmanageable. Those unsecured debts will essentially be wiped away entirely if you don’t have substantial assets that could be sold off to pay creditors some or all of what you owe.

A Chapter 13 bankruptcy, on the other hand, is sometimes the best option if you just need to put everything on pause long enough to get caught up on debt payments. In this type of bankruptcy, you come up with a court-approved payment plan over the course of 3-5 years. At the end of the payment plan period, you’re caught up and in a better position to keep it that way moving forward.

With those details explained, below are the different scenarios for declaring bankruptcy more than once:

Consecutive Chapter 7 Bankruptcy Cases: 8 Years

chapter 7 bankruptcy

Bankruptcy laws have been modified over the years to discourage frequent filings, especially for Chapter bankruptcy since it typically results in creditors receiving none of the money you owe them. In other words, bankruptcy laws aren’t meant to enable people to run up mountains of credit card debt only to wipe it all away by filing for Chapter 7 over and over. For this reason, if you get a Chapter 7 bankruptcy discharge, you are not eligible for another until at least eight years has passed from the date of your previous Chapter 7 filing.

Chapter 7 Followed by a Chapter 13 Bankruptcy: 4 Years

chapter 7 and 13

Because a Chapter 13 typically involves paying most if not all what you owe creditors, you can file a Chapter 13 after a Chapter 7 sooner than trying to do consecutive Chapter 7 cases. If you receive a Chapter 7 discharge, you are eligible to attempt a Chapter 13 bankruptcy filing if at least four years has passed from the previous Chapter 7 case.

Consecutive Chapter 13 Bankruptcy Cases: 2 Years

chapter 13

The least amount of time possible between consecutive bankruptcy filings is with a Chapter 13. After a Chapter 13 discharge, you could conceivably attempt another in as little as two years from the date the first Chapter 13 was filed. However, most Chapter 13 payment plans take place over the course of 3-5 years, so a two-year interval is very optimistic because receiving a discharge before the three-year minimum repayment plan is highly unlikely.

Chapter 13 Followed by a Chapter 7 Bankruptcy: 6 Years

chapter 13 and 7

This one is a little complicated because there are exceptions to the general rule. If you receive a Chapter 13 discharge, you are typically going to have to wait until at least six years have passed from the date of the Chapter 13 filing before attempting a Chapter 7 case. The exceptions to this six-year time interval have to do with how well you did on your Chapter 13 payment plan relative to your debts. If you paid back 100% of your unsecured debts to creditors (or even just 70% in some cases) in a Chapter 13 case, the time interval might be waived entirely. Because a Chapter 13 payment plan can last as long as five years before receiving a discharge, you could be eligible to file a Chapter 7 in as little as a year after the discharge because the time interval begins on the date the previous Chapter 13 was filed (not the discharge date).

When You Need to Finance a Car in Spite of Bankruptcy

buying a car in bankruptcy

Day One Credit helps people find a bankruptcy car loan, which is often the best way to finance a car purchase when you have an active or recently discharged bankruptcy on your credit report. You can fill out our quick online application that we will then share with our strong network of top lenders who are willing to work with bankruptcy customers. We go the extra mile to help anyone find a bankruptcy car loan if they meet our basic eligibility criteria. The bankruptcy car loans we find for you often require little or no money down at all. A bankruptcy care loan may also be an effective way to begin rebuilding your credit during and after bankruptcy when many lenders won’t give you the time of day. If you have questions about how all this works, please visit our Common Questions page to see if your answers are there, but also feel free to give us a call at 855-475-4725. We’re here to help you understand your options for getting the car you need!

A question people often have is what happens if they need to file bankruptcy more than once? Many people just assume declaring bankruptcy is a once-in-a-lifetime last resort action they can take only once. In reality, there is no legal limit to how many times you can file bankruptcy. There are, however, very strict rules … Continue reading “How Many Times Can Bankruptcy be Declared?”

What if I can’t afford to file bankruptcy?

The actual court fee you have to pay when filing bankruptcy is not very expensive, and you might be able to get help with it if you need it. The more expensive part is hiring a bankruptcy attorney to guide you through the process and handle filing your case.

The cost of filing a Chapter 7 bankruptcy in southern California, for example, is only $338, and even less for a Chapter 13 bankruptcy ($313). But if even that would be a hardship, you might qualify for a fee waiver that will let you pay the court fee in installments.

The cost of a bankruptcy attorney is an additional expense you have to pay because filing on your own is not feasible or wise. In southern California, for example, the average cost is around $1,560 for a Chapter 7 (see this article on Lawyers.com) case and anywhere from $3,300–$5,000 for a Chapter 13 case (see this article on Lawyers.com). If you can’t manage those fees because you’re low-income, you may be eligible to get free legal help. See a listing of State Legal Aid Resources at FindLaw.com. In southern California check with the Legal Aid Society of California or the San Diego Volunteer Lawyer Program.

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The actual court fee you have to pay when filing bankruptcy is not very expensive, and you might be able to get help with it if you need it. The more expensive part is hiring a bankruptcy attorney to guide you through the process and handle filing your case. The cost of filing a Chapter … Continue reading “What if I can’t afford to file bankruptcy?”

How can I get a car loan after filing bankruptcy?

One of the worst myths out there about bankruptcy is the assumption there’s no way you can get a car loan if you need one after filing bankruptcy. People end up paying what little cash they can scrape together for a horrible car that ends up being more trouble than it’s worth. Please know it is possible to get a car loan in spite of a bankruptcy, but you have to find the right kind of lender who offers a bankruptcy car loan.

It’s true that many lenders won’t approve a car loan for you if you have a bankruptcy case open or even if it’s discharged for a couple years. But there are other lenders who will work with you on a bankruptcy car loan. The interest rate on the loan is going to be higher, but that’s the extra price you have to pay for being what lenders think is a higher-risk customer.

Related post: 12 Bankruptcy Myths Busted

One of the worst myths out there about bankruptcy is the assumption there’s no way you can get a car loan if you need one after filing bankruptcy. People end up paying what little cash they can scrape together for a horrible car that ends up being more trouble than it’s worth. Please know it … Continue reading “How can I get a car loan after filing bankruptcy?”

Will I lose everything if I file for bankruptcy?

Most people understand very little about bankruptcy, which is why some resist filing bankruptcy even when it would be the best thing for them to do. One of the biggest myths out there is that people just assume filing bankruptcy means they’re going to lose everything. Not true!

Bankruptcy laws were designed to help you either eliminate or catch up on your debts, and to do so while making sure you get to keep what you need, including your house, a vehicle to drive, your retirement fund, and all the basic personal possessions you need.

But if you have tons of debts and also have lots of assets that don’t fall within what the courts think you need, then they’re going to want to sell those off to pay the creditors you owe. Bankruptcy laws get very complex around what assets you’re allowed to protect and keep, and which ones would be liquidated to pay off some or all of your debts. And this also varies from state to state. This is why you need the guidance of an experienced, reputable bankruptcy attorney to guide you through the process.

Related post: 12 Bankruptcy Myths Busted

Most people understand very little about bankruptcy, which is why some resist filing bankruptcy even when it would be the best thing for them to do. One of the biggest myths out there is that people just assume filing bankruptcy means they’re going to lose everything. Not true! Bankruptcy laws were designed to help you … Continue reading “Will I lose everything if I file for bankruptcy?”

Isn’t filing bankruptcy a sign of failure?

Many people resist filing bankruptcy even when they should because they think it’s a sign of failure. How you view your bankruptcy is your choice.

A lot of people assume filing bankruptcy is a sign of failure because they assume the person filing has been irresponsible. That may be true for some, but there are just as many who are forced to file bankruptcy through no fault of their own.

There are many reasons people file bankruptcy. If you lose your job in the middle of an economic recession, bankruptcy might become your best option. Others might get hit with giant medical bills they weren’t expecting, and bankruptcy might be their only option even if they have health insurance. Everyone’s situation is different, and plenty of people who file bankruptcy not because of any kind of failure on their part but because of circumstances beyond their control.

In many cases, filing bankruptcy is the most responsible thing you can do to get your financial life back on track. Bankruptcy laws were designed to help people get out from under crushing loads of debt and make a fresh start. Instead of viewing bankruptcy as a failure, you can view it as a new beginning to make things better. The choice is yours.

Related post: 12 Bankruptcy Myths Busted

Many people resist filing bankruptcy even when they should because they think it’s a sign of failure. How you view your bankruptcy is your choice. A lot of people assume filing bankruptcy is a sign of failure because they assume the person filing has been irresponsible. That may be true for some, but there are … Continue reading “Isn’t filing bankruptcy a sign of failure?”

Will filing bankruptcy ruin my credit forever?

People filing for bankruptcy often ask this question: Will bankruptcy ruin my credit forever? The short answer is no, but it is a little more complicated than that. Here’s what you need to know.

When you declare bankruptcy, it does stay on your credit report for anywhere from seven to ten years depending on the type of bankruptcy you filed. While that bankruptcy is on your credit history, some lenders may view it as a red flag, which in turn means you may find it difficult to obtain new loans or lines of credit. That’s the potential negative impact of bankruptcy on your credit.

But there are also lenders who have specific lending programs designed to meet the needs of bankruptcy customers. You’ll likely have to settle for higher interest rates because all lenders view you as a higher risk for default due to that bankruptcy on your credit report.

Whether your credit score goes up or down after filing bankruptcy depends on a variety of factors. If your credit score was already very low when you filed bankruptcy, then it might go up after your bankruptcy is discharged because you’ll have much less delinquent debt than before.

But however it works out, the most important thing is to start proactively rebuilding your credit as soon as possible after filing bankruptcy. That’s how you make the most of the fresh start bankruptcy was designed to give you.

Related post: 12 Bankruptcy Myths Busted

People filing for bankruptcy often ask this question: Will bankruptcy ruin my credit forever? The short answer is no, but it is a little more complicated than that. Here’s what you need to know. When you declare bankruptcy, it does stay on your credit report for anywhere from seven to ten years depending on the … Continue reading “Will filing bankruptcy ruin my credit forever?”