Can You File Bankruptcy Again?

While one may hope to only go through one financial crisis during his or her lifetime, that may unfortunately end up being wishful thinking. Imagine that you suffered from an illness or lost a job and filed for bankruptcy to get a fresh start. What happens if another unexpected financial crisis arises and you need to file for bankruptcy again? The Bankruptcy Code sets no limit on the amount of times you can file for bankruptcy. However, the Bankruptcy Code sets time period requirements between bankruptcy discharges based on the type of bankruptcy you previously received a discharge for. To determine whether or not you may be eligible to file for bankruptcy again after a previous discharge you must know the “2-4-6-8 Rule.”

The “2-4-6-8 Rule” sets the time frames that limit bankruptcy filing eligibility for multiple discharges.

• If you received a discharge in a Chapter 13 bankruptcy, you must wait 2 years from the date of the filing of that bankruptcy to file another Chapter 13.
• If you received a discharge in a Chapter 7 bankruptcy, you must wait 4 years from the date of the filing of that bankruptcy to file a Chapter 13. This is commonly referred to as a “Chapter 20” bankruptcy.
• If you received a discharge in a Chapter 13 bankruptcy you must wait 6 years from the date of the filing of that bankruptcy to file Chapter 7. However, if you paid at least 70% of your unsecured creditors in the initial Chapter 13 bankruptcy under a good faith plan, you will not have to wait this long.
• If you received a discharge in a Chapter 7 bankruptcy you must wait 8 years from the date of the filing of that bankruptcy to file another Chapter 7.

Restrictions on Filing Again if Your Case Was Dismissed

If your bankruptcy case was dismissed with prejudice because you failed to obey court orders or you voluntarily dismissed your own bankruptcy case, then the bankruptcy court will impose a 180-day bar on refiling. Additionally, if the bankruptcy court determines that you filed for bankruptcy in bad faith or committed a bankruptcy crime such as a fraud, the court can prohibit you from filing for a longer period of time or permanently preclude you from discharging certain debts.

Limitations on the Automatic Stay for Repeat Filings

One of the most valuable benefits of filing for bankruptcy is the automatic stay, which protects filers from collection efforts by creditors. However, if you have a bankruptcy case dismissed and then file another bankruptcy within one-year, the automatic stay is limited to 30 days. Two or more dismissals during a one-year period will eliminate the automatic stay in its entirety. In these situations, you can request that the court extend the automatic stay by proving, with clear and convincing evidence, that the repeat filing was in good faith.

If you have any questions about filing for bankruptcy, call or email Ruben Law anytime for a free office or phone consultation. Our telephone number is (410) 766-4044 and email is david@rubenlaw.com.  We are available 24 hours a day and ALWAYS respond very quickly.