Bankruptcy can offer relief when you’re facing financial trouble. The process allows people to discharge debts and get a fresh financial start. When other options fail—like cutting expenses, negotiating with creditors or seeking debt consolidation—many can go the bankruptcy route.
But what if you’ve already filed for bankruptcy and find yourself in financial trouble again? You might wonder, “Can I do this once more? Is it even possible?” Here’s what you need to know to understand your options.
Yes, but consider the timing
As per bankruptcy law, you can file not just once. You have the ability to file for bankruptcy multiple times in your lifetime. However, there are important time restrictions and considerations:
- Chapter 7 to Chapter 7: You are eligible to file for Chapter 7 bankruptcy again eight years after a previous Chapter 7 filing.
- Chapter 13 to Chapter 13: You can file for Chapter 13 bankruptcy again after just two years from your previous Chapter 13 filing.
- Chapter 7 to Chapter 13: After filing for Chapter 7, you must wait four years before filing for Chapter 13.
- Chapter 13 to Chapter 7: After a Chapter 13 bankruptcy, you need to wait six years before filing for Chapter 7, unless you paid all unsecured debts in the previous Chapter 13 case, or you paid at least 70% of the claims in good faith.
The waiting periods begin when you file, not when the bankruptcy is discharged or completed. It’s important to remember that while you can file for bankruptcy multiple times, you should only seek it as a last resort when absolutely necessary, not as a regular financial tool. Each filing can have long-lasting impacts on your credit score and financial future.
Plan for your financial future
The time between bankruptcy filings and your fresh start should be used to rebuild. This period is a chance to learn better budgeting habits, rebuild your credit and work toward long-term financial stability. With perseverance and smart money management, you can get through this challenging time and avoid future bankruptcy filings.