Introduction
Bankruptcy is a legal process that allows individuals or businesses to eliminate or repay their debts under the protection of the court. It provides a fresh start for those overwhelmed by financial difficulties. However, there are limitations on how many times an individual can claim bankruptcy. In this article, we will explore the rules and restrictions surrounding bankruptcy filings and answer the question of how many times one can claim bankruptcy.
Bankruptcy Chapters and Filing Frequency
In the United States, bankruptcy is governed by federal law, specifically the Bankruptcy Code. There are different chapters under which individuals and businesses can file for bankruptcy, including Chapter 7, Chapter 11, and Chapter 13. Each chapter has its own eligibility requirements and limitations.
Chapter 7 Bankruptcy: Chapter 7 bankruptcy, also known as liquidation bankruptcy, is the most common form of bankruptcy for individuals. It allows debtors to discharge most of their unsecured debts, such as credit card debt and medical bills. However, there are restrictions on how often you can file for Chapter 7 bankruptcy.
According to the Bankruptcy Code, you must wait eight years from the date of a previous Chapter 7 filing before you can file for Chapter 7 bankruptcy again. This means that if you have previously filed for Chapter 7 bankruptcy and received a discharge, you will have to wait for eight years before you can file for Chapter 7 bankruptcy again and receive another discharge.
Chapter 13 Bankruptcy: Chapter 13 bankruptcy, also known as reorganization bankruptcy, allows individuals with a regular income to create a repayment plan to pay off their debts over a period of three to five years. Unlike Chapter 7 bankruptcy, there is no waiting period for filing Chapter 13 bankruptcy after a previous bankruptcy discharge.
However, if you have previously filed for Chapter 13 bankruptcy and received a discharge, you must wait two years from the date of the previous filing before you can file for Chapter 13 bankruptcy again and receive another discharge. If you have previously filed for Chapter 7 bankruptcy and received a discharge, you must wait four years from the date of the previous filing before you can file for Chapter 13 bankruptcy and receive another discharge.
Exceptions and Limitations
While there are general rules regarding how often you can file for bankruptcy, there are exceptions and limitations to consider.
Dismissed Bankruptcy Cases: If your previous bankruptcy case was dismissed rather than discharged, the waiting period for filing another bankruptcy case may be shorter. However, it is important to note that dismissed cases may have negative implications on future filings.
Serial Filings: If you have filed for bankruptcy multiple times within a short period, the court may scrutinize your case more closely. The court has the authority to dismiss your case or deny your discharge if it believes you are abusing the bankruptcy system.
Chapter Conversion: In some cases, individuals may convert their bankruptcy case from one chapter to another. For example, if you initially filed for Chapter 13 bankruptcy but are unable to keep up with the repayment plan, you may convert your case to Chapter 7 bankruptcy. However, the waiting periods mentioned earlier still apply based on the original filing.
Conclusion
In conclusion, the number of times you can claim bankruptcy depends on the chapter under which you file and the type of bankruptcy you have previously received. For Chapter 7 bankruptcy, you must wait eight years from the date of a previous filing, while for Chapter 13 bankruptcy, the waiting period is two to four years. It is important to consult with a bankruptcy attorney to understand your specific situation and determine the best course of action.
References
– Cornell Law School Legal Information Institute: bankruptcy.uslegal.com
– United States Courts: www.uscourts.gov
– Internal Revenue Service: www.irs.gov
