Can You File Bankruptcy More Than Once?
If you want something visual that's not too abysmal* click on this graphic and zoom in on a flow chart you can use to analyze a second filing. If you are not a fan of flow charts, we provide a more complete text explanation below.
What's stopping you from filing now? Not much.
Can you file more than once? The short answer is yes. There are only a few rules that will prevent you from simply filing another bankruptcy case. But there is a catch. You might be able to file a new bankruptcy case but then discover that the second bankruptcy doesn't do you much good. The goal of most bankruptcy cases is to get a "discharge" (forgiveness) of some or all the debt obligations. There are other legitimate goals, of course, like stopping a foreclosure or stripping a second mortgage lien, but the most common goal of filing a bankruptcy is to obtain a discharge. And that's where the rules about multiple bankruptcies kick in. If you don't wait long enough between bankruptcy cases, you may discover that you are not eligible for a discharge in your new case. So, timing is everything in multiple bankruptcy cases, an area of bankruptcy also referred to as "repeat filings" or even "multiple discharges."
Click on this graphic and zoom for a flow chart where you can use simple Yes/No answers to analyze a second filing.
Can I re-file now?
Let's dispense with the first minor hurdle of "Can I file a new bankruptcy case right now?" We could call this hurdle the "Prior Dismissal No-File Rule." You are prohibited from filing a bankruptcy case if your prior bankruptcy case was dismissed within the last 180 days
and it was dismissed either
(1) by the judge for either
(a) willfully disobeying a court order, or
(b) failing to appear in court to move your case along
(2) at your own request after a creditor had filed a "motion for relief from stay."
You can see that this rule only applies where your prior case was dismissed. Dismissals are not common in Chapter 7 cases, so if your prior case was a Chapter 7 this rule will likely not apply. Dismissals are common in Chapter 13 cases but usually not for the reasons given above. That is, it is not common for a Chapter 13 case to be dismissed because the debtor disobeyed a court order. Most debtors are afraid of angering a bankruptcy judge and don't disobey court orders. Most Chapter 13 debtors also hire an attorney to help them with their case, and the attorneys assist in getting the debtors to show up for required court appearances, so Chapter 13 cases usually are not dismissed due to lack of debtor participation (though this happens more often when debtors try to represent themselves and just bungle it.) Also, most debtors do not request that their own Chapter 13 case be dismissed. When a Chapter 13 case is dismissed the most common reason is that the debtor simply was unable to pay the plan payments as promised in the Chapter 13 plan. Failure-to-pay dismissals do not trigger the rule cited above.
There is another circumstance that can prevent you from filing another bankruptcy case and that is where a bankruptcy judge has entered a special order specifically forbidding you from doing so. In the old days, some debtors would file repeat 13 bankruptcy cases like a machine gun, referred to as "serial filers", using the automatic stay of bankruptcy to continually preventing a foreclosure sale from being held, even through the debtor had no realistic way of putting together a successful Chapter 13 plan. Changes in the law regarding repeat filers and the automatic stay have eliminated the tactical advantage of such serial filings, so we don't see these special orders forbidding re-filing like we occasionally saw in the past.
That's pretty much a wrap regarding "may you file a new case" and the odds are you have passed this test because your last case was not dismissed for one of the narrow reasons listed above and there is no special court order forbidding you from filing again. So now that you
can file a new case right now,
Should you file now or is it better to wait?
This web page is entitled "Can You File More Than Once?" but a better title would be "How Long Must I Wait Before I Can Get Another Discharge?" Not a catchy title, but that better states the practical issue on the table. The answer is, you can get another discharge if you wait long enough to file your new case, and "long enough" depends mostly on what Chapter you want to file now and what Chapter you filed before. There are a lot of combinations we will cover below. But don't miss this subtle point: the following rules only apply where you received a discharge in your prior case. If you did
not receive a discharge (and you are not otherwise barred from filing as discussed above) then you can file immediately and be eligible for a discharge. So an even more accurate title for this page would be "Repeat Discharges" but that would only disappoint people hoping for an article about firearms in action.
As we go through the analysis, keep in mind a few pointers and observations:
- The waiting periods are measured from filing date to filing date. Some people think you measure from the "end" of the prior case, or from the discharge date in the prior case, but that is incorrect. You need to determine the date your prior case was filed, and measure from there to the filing date of the new case.
- Chapter 13 cases are more honored by the rules than Chapter 7 cases, and the waiting periods reflect this philosophy.
- New Chapter 11 cases are more honored than prior Chapter 11 cases.
- New Chapter 12 cases are more honored than prior Chapter 12 cases, but Chapter 12 cases hardly matter since almost nobody files them.
- Prior Chapter 13 cases in which there was a significant payout of 70% or more to unsecured creditors are more honored than cases that paid 69% or less. This is also true of Chapter 12 cases.
- In each analysis there are two bankruptcy cases, so you need to know the Chapter numbers for (1) ) the new case you would like to file and (2) the prior case. These Chapter numbers may be the same or they may be different. For example, "I'd like to file a new Chapter 7 case and my prior case was a Chapter 7." Or, "I'd like to file new Chapter 11 case and my prior case was a Chapter 13."
Let's jump into the rules. You will see the different bankruptcy chapter combinations and remember the number of years means the minimum time that must transpire between filing dates of the two cases in order for your new case to be eligible for a discharge:
a). You want to file a Chapter 7. Your prior case was a:
Chapter 7 --> 8 years
Chapter 11 --> 8 years
Chapter 12 --> 6 years. Exception: You do not have to wait at all if your prior case paid either (a) 100% to unsecured creditors or (b) at least 70%
and your plan was in good faith
and represented your best efforts
Chapter 13 --> 6 years. Exception: You do not have to wait at all if your prior case paid either (a) 100% to unsecured creditors or (b) at least 70% and your plan was in good faith
and represented your best efforts
b). You want to file a Chapter 11.
You can file immediately, no matter what you filed before or how long ago you filed it.
c). You want to file a Chapter 12.
You can file immediately, no matter what you filed before or how long ago you filed it!
d). You want to file a Chapter 13. Your prior case was a:
Chapter 7 --> 4 years
Chapter 11 --> 4 years
Chapter 12 --> 4 years
Chapter 13 --> 2 years
There you have it. There is one more thing to consider in your second case and that is the effect of the prior case on the automatic stay in the new case. This comes up only where the prior case was dismissed, but the dismissal for purposes of the automatic stay can be a dismissal for any reason, not just the once listed at the top of this article. I hope to write an article on this topic in the near future, so stay tuned.
* Credits to Rocky Horror Picture Show-- "Or if you want something visual that's not too abysmal, we could take in an old Steve Reeves movie"