When Can I File Bankruptcy Again?

04 May When Can I File Bankruptcy Again?

There is no limit on the number of bankruptcy cases that one may file. In fact, there is no limit in between time frames to file bankruptcy. Nevertheless, if sufficient time between filings does not take place, you may be not be eligible for “discharge.”

So if a bankruptcy case is filed too soon, even though it will not be dismissed, a discharge may not take place. Why would anyone do this? Well there are several reasons to name a few.

If enough time has not taken place, but a debtor wants to eliminate their debt in a subsequent chapter 7 and has sufficient assets to do so, filing another case may be a good idea. Suppose a debtor has a messy asset(lawsuit, insurance claim, etc) but wants to use that to pay creditors. By filing another chapter 7, the trustee can liquidate that asset to pay the debts. Although the debtor may not be getting top value for the asset since the trustee only cares about getting enough money to pay the creditors, it may be worth the peace of mind for the debtor in not dealing with the asset and having the trustee in charge of converting it to dollars.

Or, maybe a debtor recently filed a chapter 7 and has remaining non-dischargeable student loans or taxes. The debtor could then file a subsequent chapter 13 and be protected for the next 5 years without any worries of lawsuits, levies, or wage garnishments, even though at the end of 5 years no discharge is entered. Then, maybe at that date, the debtor might also be eligible to eliminate the debt in another chapter 7 or 13.

In a nutshell, the time frames between discharge eligibility are as follows:

8 years between 7s. -727(a)(8)

2 years between 13s. -1328(f)(2)

4 years between a 7 and 13 -1328(f)(1)

6 years between a 13 and 7(if under 70% plan). -727(a)(9)

The time is counted from filing to filing — not from first discharge to second filing.

So don’t immediately give up on bankruptcy relief just because not enough time has passed. With a little pre-bankruptcy planing and creative filing techniques, you and your attorney can probably get you the relief you need!

Written by Michael G. Doan

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  • Shirley
    Posted at 09:36h, 31 May

    I read somewhere that a consumer cannot file for the second bankruptcy before 8 years from the first filing. Is it true or is based on other situations?

  • J.W.
    Posted at 11:24h, 13 June

    Why in heavens name have the courts forced or allowed an s-corporation, small business’ sole proprietor business to be attacked both as a business and personally? filing business bankruptcy in 2005 and now must file as an individual in 2011 because those same creditors are suing them now! Filing the chapter 7 bankruptcy both times seems to be overkill or too be punished twice, both as a S-corp. and as an individual person! What is the truth?

    • Brett Weiss, Maryland Bankruptcy Attorney
      Posted at 16:30h, 17 June

      There is individual debt, and there is corporate debt. Most of the time, lenders won’t allow a small business to borrow money without a personal guarantee from the individual owner. When the debt goes into default, both the business and the owner are liable as a result.