The Myth Of The Repeat Bankruptcy Filer
Somebody’s neighbor filed for bankruptcy 5 times. That superstar is filing bankruptcy for the 3rd time in 5 years. Your friend’s cousin is on her 4th bankruptcy. Yes, there are a lot of rumors and myths about the repeat bankruptcy filer—the guy or girl who just keeps filing them, discharging their debts and walking away debt free, every year or two.
But those stories are really just that—stories and myths. Because in truth, the bankruptcy code limits how often someone can file for bankruptcy.
How Often Can Someone Refile a Case?
For a Chapter 7 case, you must wait 8 years before you can file your next case, assuming you received a discharge. If you did not receive a discharge—say, your case was dismissed—you can refile your case at any time (although you will not get the benefit of the automatic stay when you refile your case).
You can refile a Chapter 13 case much quicker—within two years of the original filing date. However, most people don’t refile chapter 13 cases (at least, not very quickly after getting their discharge), because finishing a Chapter 13 plan and getting a discharge can take between 3-5 years.
Different Kinds of Bankruptcies
Some people may want to file one kind of bankruptcy case and then another shortly thereafter. If you do a chapter 13 case first, you’ll have to wait 6 years before you can file a chapter 7 case. That’s 6 years from the filing date of the chapter 13, not 6 years from the eventual discharge (which again, will come at the completion of the chapter 13 plan).
If you complete a chapter 7 case first, and get a discharge, you will need to wait 4 years before you can file a chapter 13.
Dismissals and Denials
If your case was dismissed, or you didn’t receive a discharge, many of these deadlines won’t apply, and you can re-file immediately. However if the dismissal of your case was for failing to file a court order, you’ll have to wait 180 days before you can refile. This often happens when debtors simply don’t submit required paperwork to the bankruptcy court.
Although it is rare, it does happen that a discharge is granted, but not to all debts—that is, perhaps a creditor or the bankruptcy trustee successfully challenged your discharge. If that happens, you will not be able to ever get a discharge of debts that have been successfully challenged, and where the discharge has been denied.
As you can see, it is certainly possible to file more than one bankruptcy in your lifetime, and many people will need multiple bankruptcies. But the myth of someone filing a bankruptcy case over and over again, without penalty or consequence, is simply not legally possible.