Sometimes life can go from bad to worse. You file for Chapter 13 bankruptcy, dig out from under your debts, then a short time later, you lose your job or something else goes wrong. Your fresh start isn't so fresh anymore, and you need to file again. There's no limit to the number of times you can file for Chapter 13 protection, but you can only do it so often.
If you completed your first Chapter 13 plan and received a discharge, the court erased your debts. You paid your creditors over a three to five year period with your disposable income in a plan overseen by the court. If any of them did not receive full payment, your bankruptcy relieved you from any obligation to pay the balances. In this case, you must wait two years before you can file a new Chapter 13 plan. The clock doesn't begin running with the date of your discharge, however. The two-year period starts when you file your first Chapter 13 petition with the court. Because almost all Chapter 13 plans extend beyond two years, you can usually file again right after your discharge, if you must.
The situation changes if you didn't finish your first Chapter 13 plan. If either you or the court dismissed your bankruptcy, the two-year rule no longer applies. For example, if the court dismissed your case because you couldn't keep up with your payments or you did so yourself because one of your creditors asked the court to set aside the automatic stay, you can usually refile a new Chapter 13 plan in six months, or 180 days, unless the court expressly forbade it as part of the dismissal. This might seem like a good deal, but there's a catch. Your automatic stay – the rule that prevents creditors from pursuing you for payment while your plan is in effect – can be shortened considerably if you refile within a year. It may only last a month, and if you file a third time within a year, you could lose the stay entirely.
If you filed for Chapter 13 before, it doesn’t necessarily mean you must file the same chapter again. If your troubles are particularly serious, you can file for Chapter 7 instead. Chapter 7 liquidates your assets, gives the money to your creditors and absolves you from having to pay any balances that remain. The downside to this option is that if you received a Chapter 13 discharge, you must wait six years to file for Chapter 7 relief. However, the six years begins from the date you filed your first Chapter 13 petition. An exception exists if you repaid your creditors 70 to 100 percent of what you owed under your Chapter 13 plan. If so, the court might waive the six-year waiting period.
Bankruptcy law sets statutory time limits on when you can refile and how often you can do so, but other factors may be involved in getting a new Chapter 13 plan approved as well. Every one of your bankruptcies are on record with the court. If you repeatedly file for protection, the trustee assigned to your case will notice. This might affect his decision regarding approval for another Chapter 13 plan.
References & Resources
- U.S. Courts: Individual Debt Adjustment
- U.S. Courts: Discharge in Bankruptcy
- Tennessee Alliance for Legal Services: Chapter 13 Bankruptcy (PDF)
- Fabricius Law Bankruptcy: After Being Dismissed, Can I File Chapter 13 Bankruptcy Again?
- The Law Office of Jonathan T. Mitchell: Time Limits Apply to Filing Back-to-Bank Bankruptcy Petitions
- Glanzer & Associates: Can You Refile a Chapter 13 Bankruptcy After Dismissal?