How Often Can You File Bankruptcy?

LOUISVILLE BANKRUPTCY ATTORNEY

How Often Can You Declare Bankruptcy?

If you have filed for bankruptcy before, how often can you file bankruptcy? At O'Bryan Law Offices, we can help you regain control over your financial future. Contact us today to learn more.

First and foremost, there are no restrictions on the number of times a person can file for bankruptcy relief. However, there are limits on how many times someone can receive a Bankruptcy discharge, or a complete relief of debt.

Declaring bankruptcy can reduce or even eliminate these debts for you. But that alone comes with a price. Filing bankruptcy can harm your credit score in the long run. This might make it hard to borrow money or receive loans in the future. It could also dramatically increase the rates you pay in insurance. In some cases, it might even affect your ability to get a job. 

So while it can help relieve debts, filing bankruptcy shouldn’t be something you jump right into. In fact, declaring bankruptcy should be a last resort. If you feel like you have reached your last resort and this is what you need to do, then we can help you. At O’Bryan Law Offices, we'll make this process as easy as possible for you and your family. We want to help get you back up on your feet, and we’ll do what it takes to get you there.

When it comes to filing more than one bankruptcy, the thing that really matters is timing. If your debts were discharged in a previous bankruptcy, you must wait a certain amount of time before you will be entitled to a discharge again.

Whether you can file another bankruptcy and receive a discharge depends on a few different factors:

  • the type of bankruptcy previously filed
  • the date the previous bankruptcy was filed
  • whether the previous bankruptcy was discharged, dismissed, or dismissed with prejudice

Time restrictions on when you are eligible for another discharge depend on whether you previously received a Chapter 7 or Chapter 13 discharge and the type of bankruptcy you want to file now. According to alllaw.com these are the bankruptcy filing guidelines:

While bankruptcy may be an effective way for Kentucky residents and others to reorganize or eliminate debt, there are limits to how often a person can file. In some cases, those who egregiously abuse the bankruptcy system may be barred from using it again after their cases are dismissed. Individuals who are allowed to file for bankruptcy multiple times may only get a limited automatic stay or no automatic stay of creditor activity. This means that creditors may be able to contact a debtor, garnish wages or file a lawsuit.

If a stay is not automatically granted, an individual may ask a judge to put one in place. It may also be possible to ask to extend a stay beyond 30 days from the time a case is filed. When considering a person’s request, a judge will look at how many cases a person has filed in the past year or several years. He or she will also examine the reasons why previous cases were dismissed when determining whether a stay will be granted or extended.

Bankruptcy cases can be dismissed for a variety of reasons such as failing to stick to a repayment plan or because of an attorney error. Finally, an automatic stay could be put into place or extended if a debtor’s circumstances have recently changed.

Those who are looking to reorganize their debts may be able to do so by filing for bankruptcy. Filing for Chapter 13 protection may allow a person to retain a home, car or other property while repaying creditors. Those who file for a reorganization bankruptcy will typically make payments over a period of three or five years depending on their level of disposable income. Any debt balances that remain after the repayment period ends may be discharged.

How Often Can You File for Chapter 7 or Chapter 13 Bankruptcy?

It’s most likely the case that when filing for bankruptcy as an individual, you’ll deal with either Chapter 7 or 13. We’ll touch on the basics of each of these below:

If you have already received a discharge in a Chapter 7 bankruptcy, you must wait eight years from the date you filed the previous case before you can file another Chapter 7 and receive a discharge.

Chapter 7 Bankruptcy is the most common type of bankruptcy that individuals file for. It is also known as straight bankruptcy or liquidation. This is when a trustee appointed by the court administers the sale of your assets. Anything you own that may be of value might get sold to pay back your debts. Although courts may excuse necessities like your house, car, or retirement accounts, it’s not guaranteed that they will. 

Once your assets get liquidated, any other debts are generally forgiven. This includes things like medical bills or credit card bills. Things like student loans or taxes are not exempt and will still need to get paid off eventually.

Chapter 7 Bankruptcy is only available to those who the court decides cannot make enough money to return their debt. Eligibility gets determined by what’s called a means test. The test takes into account your own income versus the state average income. After comparing the two, it considers whether you have the means to pay back most or some of what you owe. If they determine you do not have the means, you qualify for this type of bankruptcy. 

Chapter 7 cannot stop the foreclosure of your home, but it can delay it. The process for this type of bankruptcy claim generally lasts somewhere between 3 to 6 months. 

If your debts were discharged in a prior Chapter 13 case, you cannot receive a discharge in a subsequent Chapter 13 unless it is filed at least two years after the date the first case was filed. Because it usually takes three to five years to complete a Chapter 13 repayment plan and receive a discharge, you can typically file for another Chapter 13 bankruptcy and be eligible for a discharge immediately after your first case is closed.

Rather than forgiving some of your debt, Chapter 13 bankruptcy restructures it. It allows you to keep your assets and gives you time to get caught up in repaying debts. The court will construct a payment plan, usually a monthly one, that allows you to pay back portions of your debt over a certain period of time. As well as organizing your payment plans, the court is also able to require you to stick to a strict budget. They can even check your spending to make sure you’re on the right track.

Chapter 13 bankruptcy is available to anyone with an unsecured debt below $250,000 and a secured debt below $750,000. You must also be up-to-date on your tax filings. Chapter 13 can help stop a foreclosure by giving you more time and a plan for how to pay your housing bills. 

The entire process takes, on average, 3-5 years to complete.

If your first discharge was under a Chapter 7 bankruptcy, you can file for a subsequent Chapter 13 and be eligible for a discharge if the case is filed at least four years after the filing date of the initial Chapter 7. Keep in mind that filing a Chapter 13 bankruptcy after receiving a Chapter 7 discharge can still help you pay off priority debts or get caught up on missed mortgage or car loan payments even if you are not entitled to a discharge. Filing for Chapter 13 bankruptcy following a Chapter 7 discharge is commonly referred to as a Chapter 20 bankruptcy.

Finally, if you received a discharge in a previous Chapter 13 bankruptcy, you must wait six years from the date the Chapter 13 was filed before you can file for and receive a discharge in a subsequent Chapter 7 case. But there is an exception to this rule. The six-year rule does not apply if, in the previous Chapter 13, you paid back:

  • all of your unsecured debts
  • at least 70% of your unsecured debts and your plan was proposed in good

Contact Louisville Bankruptcy Attorneys at O'Bryan Law Offices

O’Bryan Law Offices is Louisville, Kentucky’s top bankruptcy law firm. If you are considering filing for bankruptcy, you’ve come to the right place. You don’t need to suffer alone through the stress of increasing debt pressure. Our firm combines an in-depth understanding of bankruptcy law and strategy with individualized, compassionate client service.

In addition to helping you get relief from overwhelming debt, we can also assist you with problems like mortgage foreclosure, tax obligations or small business restructuring. If you need legal financial help, contact O’Bryan Law Offices today. Fill out our form or give us a call at 502-339-0222 to see how we can help you get your life back on track.