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How Often Can You File Bankruptcy?

Bankruptcy Claim

The aim of any bankruptcy is to give debtors a fresh start and allow them to set down the weight of past mistakes or events outside their control (like medical debts). Unfortunately, sometimes the hits keep coming even after the bankruptcy is over. New financial problems and creditor calls may make you wonder, how often can you file bankruptcy?

Can You Get a Second Bankruptcy?

Nothing in the bankruptcy code prevents you from filing bankruptcy a second time. In fact, some very famous business people, including former-President Donald Trump have filed for bankruptcy many times over. (Some of these were filed by their business entities.) There is a waiting period between bankruptcy discharges. However, once that has passed, as long as you meet the filing requirements you can get a second bankruptcy and get a third chance to walk away free of dischargeable debts.

But be warned: getting second bankruptcies discharged are harder than the first. Creditors and your bankruptcy trustee will be taking a much closer look at how you are spending your money. They will also be looking to see whether you are using bankruptcy to commit fraud against your creditors. Be sure to work with an experienced bankruptcy attorney in preparing your second bankruptcy, so it will stand up to the scrutiny.

When Can You File Bankruptcy Again?

The waiting periods for receiving a discharge a second bankruptcy depend on whether you filed a Chapter 7 or Chapter 13 bankruptcy before, and which type of bankruptcy you want to file now:

  • Prior Chapter 7, filing Chapter 7 again: 8 years
  • Prior Chapter 7, now filing Chapter 13: 2 years
  • Prior Chapter 13, filing Chapter 13 again: 4 years
  • Prior Chapter 13, now filing Chapter 7: 6 years

These waiting periods apply from the date of the filing of the petition in your first bankruptcy to the date you file your second bankruptcy. In many cases, you can file for bankruptcy sooner. For example, you can file a Chapter 13 anytime after filing a Chapter 7 or Chapter 13 bankruptcy. However, you will not be eligible to discharge any debts unless the appropriate waiting period is over. You can also file a Chapter 7 anytime after successfully completing a Chapter 13 bankruptcy and receiving a discharge as long as your creditors in the first bankruptcy receive 100% of what they are owed.

Why File for Bankruptcy if You Can’t Discharge Your Debts?

There are benefits to filing for bankruptcy even if you can’t discharge your debts at the end of the process. If you continue to have debt problems, or begin to once again be hounded by creditors and collections agencies, filing for a Chapter 13 bankruptcy can create a protected payment structure to help you pay down those debts and keep the creditors off your back.

Remember that every bankruptcy filing triggers an automatic stay on collection efforts -- including foreclosures on your home or repossession of your vehicles. Once the Trustee approves your payment plan, you will have 3 to 5 years to get your finances in order, increase your income, and get ahead of your debts. Even if the remaining balances can’t be discharged at the end of the period, you will still probably be in a better position to manage your debts and avoid taking another trip through the court system.

Do You Need to Go Through Credit Counseling Again in a Second Bankruptcy?

The requirements when you file a bankruptcy again are the same as when filing for the first time. That includes completing the pre-filing credit counseling and the post-filing financial management class. You can’t waive these requirements by having already completed them the first time around.

Even though many bankruptcies are triggered by circumstances beyond your control, the Bankruptcy Code assumes debtors will benefit from being taught how to better manage their money. To make effective use of this do-over requirement, be prepared to apply the counseling to your new financial situation, so you can better manage your debts after the second bankruptcy is complete.

When life just won’t let up, you may be watching the clock and questioning, how often can you file bankruptcy? But there may be other options including a bankruptcy without a discharge, or negotiating with your creditors directly. We can help. At John A. Steinberger & Associates, P.C., we are a full-service bankruptcy law firm in Southeast MI. We help debtors and families in Southfield, throughout Metro Detroit, and in the surrounding communities get out of debt through Chapter 7, Chapter 13, and non-bankruptcy options. If your financial situation has you looking for a way out, call us toll-free at (866) 690-2140 or contact us online to schedule a free initial consultation.

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