Introduction
Filing for bankruptcy is a legal process that allows individuals or businesses to eliminate or repay their debts under the protection of the court. However, it is not a decision to be taken lightly, as it can have long-lasting consequences on one’s financial future. One common question that arises when considering bankruptcy is how often it can be filed. In this article, we will explore the frequency at which bankruptcy can be filed and the factors that may affect this.
Types of Bankruptcy
Before delving into the frequency of filing bankruptcy, it is essential to understand the different types of bankruptcy available. The two most common types are Chapter 7 and Chapter 13 bankruptcy.
Chapter 7 Bankruptcy: This type of bankruptcy is also known as liquidation bankruptcy. It involves the sale of non-exempt assets to repay creditors. Chapter 7 bankruptcy can provide a fresh start by eliminating most unsecured debts.
Chapter 13 Bankruptcy: Unlike Chapter 7, Chapter 13 bankruptcy involves creating a repayment plan to pay off debts over a period of three to five years. This type of bankruptcy is suitable for individuals with a regular income who want to keep their assets and catch up on missed payments.
Frequency of Filing Bankruptcy
The frequency at which you can file for bankruptcy depends on the type of bankruptcy you previously filed and the outcome of that case.
Chapter 7 Bankruptcy: If you have previously filed for Chapter 7 bankruptcy and received a discharge, you must wait eight years from the date of filing before you can file for Chapter 7 bankruptcy again. This waiting period ensures that individuals do not abuse the system by repeatedly seeking debt relief.
Chapter 13 Bankruptcy: If you have previously filed for Chapter 13 bankruptcy and received a discharge, you must wait two years from the date of filing before you can file for Chapter 13 bankruptcy again. However, if you want to file for Chapter 7 bankruptcy after a Chapter 13 discharge, you must wait six years from the date of filing.
It is important to note that these waiting periods apply to receiving a discharge, not the date of filing. If your previous bankruptcy case was dismissed without a discharge, you may be able to file for bankruptcy again sooner.
Exceptions and Special Circumstances
While the waiting periods mentioned above are standard, there are exceptions and special circumstances that may allow individuals to file for bankruptcy sooner.
Change in Circumstances: If you experience a significant change in circumstances, such as a job loss or a medical emergency, you may be eligible to file for bankruptcy sooner than the waiting period allows. However, you must be able to demonstrate that your current financial situation warrants an earlier filing.
Chapter 13 to Chapter 7 Conversion: If you initially filed for Chapter 13 bankruptcy but are unable to continue with the repayment plan, you may be able to convert your case to Chapter 7. This conversion can be done at any time, regardless of the waiting periods.
Conclusion
The frequency at which you can file for bankruptcy depends on the type of bankruptcy you previously filed and the outcome of that case. For Chapter 7 bankruptcy, the waiting period is eight years from the date of filing, while for Chapter 13 bankruptcy, it is two years from the date of filing. However, exceptions and special circumstances may allow for earlier filings. It is crucial to consult with a bankruptcy attorney to understand your specific situation and determine the best course of action.
References
– United States Courts: Bankruptcy Basics – www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics
– Legal Information Institute: Chapter 7 – Bankruptcy Basics – www.law.cornell.edu/wex/chapter_7_-_bankruptcy_basics
– Legal Information Institute: Chapter 13 – Bankruptcy Basics – www.law.cornell.edu/wex/chapter_13_-_bankruptcy_basics
