Filing for bankruptcy is always the last option for any debtor that wishes to be free of their burdensome financial obligations. What happens when one wishes to start over more than once, though? This leads many to ask whether one is allowed to file for bankruptcy repeatedly. Whether you are contemplating filing for a second, or even third, time, it is important to understand the maze of regulations and restrictions that govern your filing. We value and appreciate all informed decisions.
Filing for Bankruptcy More Than Once
The answer is yes; the filing can be done repeatedly. It is a more complicated process, and it differs in terms of the consequences attached depending on the type, the duration, and guidelines relative to that bankruptcy. Let’s figure out what you need to know if you’re contemplating bankruptcy more than once.
Types of Bankruptcy You Can File
When addressing the issue of multiple filings, the first thing that requires attention are the two most common types of bankruptcy an individual can file for — Chapter 7 or Chapter 13. Each of these has its own rules and constraints for subsequent applications.
- Chapter 7 Bankruptcy: This type of bankruptcy eliminates unsecured non-priority debts such as credit cards and medical expenses. It doesn’t require any sort of payment plan and can be completed within 3 to 6 months. However, there is a waiting period if you want to refile this type of bankruptcy again.
- Chapter 13 Bankruptcy: Given the name of the chapter, this type of bankruptcy is set for individuals who have the capability to earn steadily but struggle to manage their debt. This type of bankruptcy comes with a repayment plan where the debt is paid back over a course of 3 to 5 years. If you intend to file Chapter 13 again, you will have to submit court-approved repayment terms and the court will review your finances before giving approval.
How Often Can You File for Bankruptcy?
The number of times you can seek bankruptcy protection depends on the kind of bankruptcy you filed for, how much time has elapsed since the filing, and whether you were previously discharged for those cases. Nonetheless, the laws specify waiting periods for Chapter 7 and Chapter 13 bankruptcies. These are detailed below.
Filing for Chapter 7 Multiple Times
You can file a Chapter 7 bankruptcy case as many times as you wish, but you must adhere to the waiting periods set before you can file a new case. The waiting periods for certain situations are mentioned below.
- If you are filing Chapter 7 for the first time and you anticipate the submission of your previous case, then you need to submit the current case at least 8 years after the discharge of the previous case.
- If you filed a chapter 13 bankruptcy south carolina, you need to wait 6 years after the discharge of those debts. However, should you have paid at least 70% of those debts, then you can proceed to file for Chapter 7 immediately after the discharge.
Filing for Chapter 13 Multiple Times
It is entirely possible to file for Chapter 13 bankruptcy multiple times, but it is crucial to consider these particular rules before doing so particularly with respect to time intervals between filings:
In cases where there was a discharge following the Chapter 13 petition: You can file another Chapter 13 bankruptcy application, but this can only be done once two full years have passed from the date of the last application. If there was no discharge from the previous Chapter 13 case, there is no waiting period, but there will be additional scrutiny to your new claim.
When filing under Chapter 7 and after being granted a discharge: The norms dictate that there needs to be four years sped waiting after being discharged before filing an application for Chapter 13 bankruptcy.
Legal Ramifications of Filing Bankruptcy Multiple Times
The court permits the filing bankruptcy in sc applications more than once; however, there are serious repercussions concerning this matter that must be considered before dealing with additional claims.
Impact on Your Credit: Your credit score can take quite a hit everytime you declare bankruptcy. Each type, chapter 7 or 13 bankruptcy, will remain on your credit report for 10 and 7 years respectively, which significantly damages your credit score for the long term. Filing a bankruptcy claim multiple times can only worsen your credit score and make it increasingly difficult for you to improve it over time.
Eligibility for Debt Discharge: Each individual bankruptcy claim does not guarantee the ability to discharge for debts. It is at the discretion of the court to decide whether the claim is acceptable after the debtor’s financial standing is evaluated. In some occurrences, such as repetive claims being filed, the court may refuse to grant a discharge.
Difficulty in Qualifying: It is also possible that if there have been numerous claims of bankruptcies, the chances of getting approval may be slim. Future filers of a bankruptcy claim also need to consider their previous financial decisions and actions of contact with the creditors. All these factors will be assessed prior to giving provisions to a discharge of debts.
Repeat Filings Could Be Unduly Seen As Abuse – if you are filing for bankruptcy multiple times then that could be deemed abusive if you’ve previously discharged huge debts only to acquire new ones. The court may take it that you are abusing the system and your future applications may be rejected.
Alternatives to Filing Bankruptcy Again
While contemplating re-filing, say for a second or a third time, it might be worth your while to you look at other forms of relief that may be more beneficial to you.
- Debt Settlement: This is where you negotiate with creditors to reduce the amount owed. It’s less damaging to your credit score than filing for bankruptcy.
- Debt Consolidation: This is bringing all of your loans under one umbrella loan with a comparatively lower interest rate, which makes payments simpler.
- Credit Counseling: A credit counselor is in a position to assess your standing with your creditors and assist in creation of a viable debt repayment scheme.
Conclusion
You can declare for bankruptcy as many times as you deem necessary, but one must take great care when making such a choice. Although overwhelming debts can be relieved by declaring for bankruptcy, but filing for it multiple times can make things worse. Knowing the timing requirements, long-term implications, and rules of a multi-filing can aid your decision making related to the finances.
Moreover, if you find yourself thinking of filing for bankruptcy over and over again, an expert bankruptcy lawyer can surely make things easier for you by giving you clear solutions towards the available options for debt relief.
