Unless a bankruptcy court deems otherwise (more on this below), there is no limit to the number of bankruptcy cases that an individual can file. However, where restrictions come into the picture is with respect to the length of time that must pass between filings. To make things a little more complicated, the restrictions are also based on the type of bankruptcy filing (i.e. chapter).
Currently, here are the rules:
Chapter 7 to Chapter 7If an individual previously filed for chapter 7 bankruptcy and received a discharge, then they must wait 8 years from the date of the previous filing (not the date of discharge) before they can file again for chapter 7 bankruptcy.
Chapter 13 to Chapter 13If an individual previously filed for chapter 13 bankruptcy and received a discharge, then they must wait 2 years from the date of the previous filing (not the date of discharge) before they can file again for chapter 13 bankruptcy. With this being said, most chapter 13 bankruptcy filings are linked to a repayment plan that lasts for 3-5 years. As such, practically speaking, most people can file for chapter 13 bankruptcy immediately after their previous chapter 13 filing closes (since for them the 2-year waiting period would have entirely passed).
Chapter 7 to Chapter 13If an individual previously filed for chapter 7 bankruptcy and received a discharge, then they must wait 4 years from the date of the previous filing (not the date of discharge) before they can file again for chapter 13 bankruptcy. This approach (filing for chapter 7 bankruptcy and then filing for chapter 13 bankruptcy) is commonly and informally called “chapter 20 bankruptcy,” and is sometimes sought by individuals who need help paying off key debts, or have the opportunity to get caught up on missed mortgage and/or car payments.
Chapter 13 to Chapter 7If an individual previously filed for chapter 13 bankruptcy and received a discharge, then they must wait 6 years from the date of the previous filing (not the date of discharge) before they can file for chapter 7 bankruptcy. However, the 6-year waiting period does not apply if during the chapter 13 proceedings the individual paid back all of their unsecured debts, or they paid back at least 70 percent of their unsecured debts and their repayment plan was deemed by the court to be proposed in good faith and executed with the best of intentions and efforts.
Extensions to the Waiting Period
As noted above, the court may extend the amount of time that an individual must wait before filing a new bankruptcy case. This is referred to as dismissing a case with prejudice (as opposed to dismissing a case without prejudice, in which case there would be no additional filing restrictions).
The court may dismiss a case with prejudice if it deems that an individual:
Willfully failed to obey court orders. Filed multiple bankruptcy cases in an attempt to delay creditors. Attempted (regardless of success) to abuse the bankruptcy system. Committed (or attempting to commit) bankruptcy fraud by hiding assets or lying in any of their submissions or statements.
In cases that involve severe transgressions, the court can permanently ban an individual from discharging debts that were earmarked for discharge in a case that was dismissed with prejudice.
For example, if $10,000 in medical debt was going to be discharged per a chapter 7 bankruptcy filing, but the court later discovered that the individual filing the case knowingly hid assets in order to prevent them from being liquidated by the trustee, then that $10,000 in medical debt could be blocked from being discharged in any future bankruptcy filing. The individual would therefore have to pay it either by settling in some way with the creditor, or by obeying a court order per a civil lawsuit filed by the creditor.
To learn more about bankruptcy filing rules and for a clear picture of all available options that are at your disposal, contact the Law Office of Charles H. Huber. We have over 30 years of experience filing bankruptcy cases.