How many times can you file for bankruptcy?
Bankruptcy is a financial tool available to everyone in their time of greatest need. And it is often the only way to lay down your burden and relieve that overwhelming sense of financial stress.
But if you’ve ever filed in the past, it’s important that you understand when you’re eligible to file bankruptcy again. There are some limits to keep in mind as you move past your previous bankruptcy filings.
Keep reading to learn how often you can file bankruptcy in the state of California.
Chapter 7 and Chapter 13: Know the Difference
Before we hop into the timing specifics, let’s review the two types of personal bankruptcy available to you.
Chapter 7 bankruptcy is often referred to as liquidation bankruptcy. With this type of filing, many of your debts can be eliminated through a discharge (more on discharges later in the article).
However, not all debts go away with a Chapter 7 filing. Student loans, child support, and certain tax debts are some examples of debts that don’t go away with Chapter 7. Talk to your attorney to get more specifics on what debts are eligible for discharge.
Chapter 13 bankruptcy, also called a wage earners plan, doesn’t actually get rid of your debts. It creates a more realistic payment plan that will allow you to keep your assets and continuing paying your debts. This plan only works if you have sufficient income to make the debt payments on the new plan.
Understanding Bankruptcy Discharge
The discharge order marks the end of the bankruptcy process. It’s approved and issued by the bankruptcy court.
The discharge is important because it signals the end of your obligations with Chapter 7. And it marks the beginning of your new payment plan with Chapter 13.
Once the debt has been discharged, creditors aren’t allowed to pursue collection tactics on the debts. This means they can’t send letters, make threatening calls, or show up at your door demanding payment.
If you file bankruptcy, but discharge is never issued by the court, then your case is simply dismissed and your debts remain in place. This might happen if you change your mind or if your bankruptcy isn’t done in accordance with laws. This is why it’s so important to hire an experienced attorney to help you through the process.
How Many Times Can You File for Bankruptcy?
If you’ve filed bankruptcy but never received a discharge, then there is no limit on the amount of time you must wait to file again. The following time limits only apply to those bankruptcy filings that have received a discharge. These limits go by filing date, not discharge date.
- Chapter 7 to Chapter 7 – 8 years
- Chapter 7 to Chapter 13 – 4 years
- Chapter 13 to Chapter 13 – 2 years
- Chapter 13 to Chapter 7 – 6 years
Let’s look at an example. If you file for Chapter 7 bankruptcy on January 1, 2020, and received a discharge, then you must wait until January 1, 2028 to file for Chapter 7 again. In the same scenario, you must wait until January 1, 2024 to file for Chapter 13 bankruptcy.
Don’t Go It Alone: Hire a Bankruptcy Attorney
How many times can you file for bankruptcy? The answer is: as many times as you need to within certain time limits.
If you’re considering filing for bankruptcy in California and have filed in the past, it’s very important that you talk to an attorney. There are some exceptions to the rules and your attorney can let you know if you’re eligible.