How Many Times Can You File Bankruptcy?

Bankruptcy is usually the last resort for individuals who are overwhelmed by debt. Bankruptcy can provide a second chance to those individuals or companies to begin anew, either through wiping out unsecured loans or stretching payments into something more palatable. But what happens if money woes return after you’ve already had to file once? Several ask: how many bankruptcies are allowed?

The response is not as straightforward as “once” or “twice.” There are multiple filings permitted by U.S. bankruptcy law, but with comprehensive restrictions on timing, form of bankruptcy, and discharge eligibility. Let’s walk through the process.

Why People File Bankruptcy More Than Once

Life is uncertain. Even after experiencing bankruptcy and receiving a new beginning, unforeseen circumstances like loss of employment, illness, or economic recession can force a person into financial straits again. For this reason, the law does not prohibit several bankruptcies. What it does instead is establish waiting times that strike a balance between relief and the prevention of abuse of the system.

Two Main Types of Personal Bankruptcy

Before learning about the filing limits, one should be aware of the difference between the two most popular types of consumer bankruptcy.

Chapter 7 Bankruptcy

Chapter 7, also referred to as “liquidation bankruptcy,” is for wiping out most unsecured debts, including credit card and medical debt. It’s typically fast—sometimes finished in four to six months. But not all debts are included, and you may need to surrender some non-exempt assets. Chapter 7 is ideal for individuals who don’t have much or any disposable income.

Chapter 13 Bankruptcy

Chapter 13 is “reorganization bankruptcy.” Rather than erasing debt immediately, it establishes a plan for paying back debt that will extend from three to five years. Debtors pay monthly amounts according to their income, and when the plan is complete, remaining qualifying debts are eliminated. This is best for individuals who have a stable income source and do not wish to lose assets such as a home or vehicle.

How Often Can You File Chapter 7 Bankruptcy?

There’s technically no limit on how many times you can file Chapter 7. But the primary restriction is the waiting time between filings:

Eight-Year Rule: If you previously received a Chapter 7 discharge, you need to wait eight years from the date of filing your previous Chapter 7 case before you file again and get another discharge.

This regulation prevents Chapter 7 from being repeated to avoid debts too quickly.

How Often Can You File Chapter 13 Bankruptcy?

Chapter 13 gives you more leeway since it entails repayment rather than cancellation of debt.

Two-Year Rule: Once you have done a Chapter 13 and been discharged, you will have to wait a minimum of two years since you filed your Chapter 13 case to file another Chapter 13 case.

Because repayment programs take a maximum of five years, most individuals won’t be eligible for a second Chapter 13 right away. Nevertheless, the two-year rule leaves space for individuals who had a very brief plan or required another adjustment shortly afterwards.

Filing Chapter 13 Following Chapter 7

At times individuals complete a Chapter 7 case but subsequently require a Chapter 13 to save assets such as a home. This pairing is referred to as a “Chapter 20.”

Four-Year Rule: You have to wait four years since the filing of a Chapter 7 case before you can file Chapter 13 and qualify for a discharge.

This route can assist with debts that were not discharged under Chapter 7 or address subsequent obligations that do appear. 

Filing Chapter 7 Following Chapter 13

The opposite scenario also occurs: someone files Chapter 13 initially but later experiences a change of financial health in which Chapter 7 is needed.

Six-Year Rule: If you had a discharge in Chapter 13, you have to wait six years after the filing date before you can file Chapter 7.

Exception: If you paid at least 70% of your unsecured debts under the Chapter 13 plan, the waiting period may not be required.

This exception is given to debtors who seriously tried to pay back creditors.

Can You File Bankruptcy Twice?

Yes, you can. Indeed, there isn’t a lifetime limitation of bankruptcies. The waiting periods and discharge restrictions are the true limitations. It might be too early to file, and you might not qualify for another discharge, defeating the purpose of bankruptcy. 

The Bottom Line

Bankruptcy is a process designed to assist individuals in getting their financial lives back together, rather than something you do on a whim. You can file again, but waiting periods and discharge rules suggest that each filing should be well planned.

If you are asking how many bankruptcies are allowed in your case, the response is based on your previous filings and your financial objectives. Speaking with a bankruptcy lawyer will help make the proper choice, making sure that a new filing really serves your long-term stability.

Bankruptcy is not the end—it can be the beginning of a better financial future if utilized properly.

Frequently Asked Questions

How quickly may I file Chapter 13 after Chapter 7?

You must wait four years if you wish to get a discharge in the Chapter 13 case.

May I file Chapter 7 subsequent to Chapter 13?

Yes, but generally not until six years have elapsed—unless you paid a large part of your debts in Chapter 13.

How frequently may I file bankruptcy in total?

There is no strict lifetime limit, but the above rules govern how often you can be given debt relief.