Can You File Bankruptcy Twice?

Yes, you can file for bankruptcy twice; however, there are limits to how often you can receive a discharge.

The timetable is as follows:

  • Chapter 7 after Chapter 7: every 8 years
  • Chapter 7 after Chapter 13: after 6 years
  • Chapter 13 after Chapter 7: after 4 years

    Chapter 13 after Chapter 13: every 2 years

How Bad Is It to File Bankruptcy Twice?

If you have waited the appropriate amount of time since your last bankruptcy, then the worst effect of filing twice will be the hit to your credit score.

Bankruptcy usually affects high scores more than already low scores, so you may need to investigate for yourself how your credit will be impacted.

Can You File Bankruptcy Twice FAQs

Bankruptcy is a legal proceeding in which a debtor declares their inability to pay back their creditors. 
There are three common types of bankruptcy known as “chapters” in the U.S. bankruptcy code, Ch. 7, Ch. 11, and Ch. 13, each with varying criteria and consequences.
Chapter 7 is known as a liquidation bankruptcy. Most of your property will be sold to pay off your debts, then whatever debt in excess of the value of your liquidated property will be cleared.
Chapter 13 bankruptcy is a reorganization bankruptcy. With Chapter 13, you are able to keep your personal property and reorganize your debts to a payment schedule that enables you to pay back your creditors over time (often 3 to 5 years).

What is Bankruptcy?

What Is Bankruptcy? The Three Chapters of Bankruptcy

There are three common types of bankruptcy known as “chapters”in the U.S. bankruptcy code, Ch. 7, Ch. 11, and Ch. 13, each with varying criteria and consequences.

Ch. 7 Bankruptcy

The most common type of bankruptcy is Chapter 7.

Chapter 7 bankruptcy is known as “straight”or “liquidation”bankruptcy.

It is designed to give a “fresh start”by discharging debts that cannot be repaid through the liquidation of the debtor’s assets.

Upon filing Chapter 7, a trustee is appointed to sell the debtor’s non-exempt assets and distribute the proceeds to creditors.

For individuals, the law exempts certain assets such as retirement funds, primary residence, tools for their trade, and personal vehicles from being liquidated to pay back creditors.

This pays back creditors some of what they are owed and protects individuals from having all of their livelihood taken from them.

Ch. 11 Bankruptcy

Chapter 11 bankruptcy is primarily for companies, allowing them a break on paying their debts in order to restructure, come up with new terms for paying their creditors, and become profitable again.

This allows companies to stay afloat while coming up with a new way to pay back creditors.

Chapter 11 is the most complex and expensive form of a bankruptcy proceeding and should therefore be considered after other options have been explored.

Ch. 13 Bankruptcy

Chapter 13 bankruptcy, known as a “Debtor in Possession”Bankruptcy, stands in contrast with Chapter 7 because it allows the individuals to keep from liquidating their property.

Chapter 13 creates a new, more affordable payment plan for the debtor to repay creditors, usually lasting 3 to 5 years.

Once the payment plan is finished, the remaining unsecured debts are discharged.

Bankruptcy FAQs: