How Many Times Can You File Chapter 13?

By Beverly Bird

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.

After Discharge

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.

After Dismissal

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.

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Chapter 7

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.

Other Considerations

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.

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Rules for Filing a Second Bankruptcy

Depending on the type of second bankruptcy you want to file, there may not be a waiting period or a waiting period of up to eight years. A second bankruptcy may also be filed after a dismissal of the first one. A dismissal is different from a discharge. A discharge releases you from any liability to your creditors, while a dismissal is when the court throws out your case before it is completed. Usually, a dismissal arises from a failure to file necessary documents or failing to make payments under a Chapter 13 repayment plan.

How Does Reaffirmation in Bankruptcy Work?

Bankruptcy is about fresh starts. Filing for Chapter 7 protection allows your bankruptcy trustee to liquidate property you own outright, without liens, and apportion the proceeds among your creditors, although you can use exemptions to protect some property. You have to qualify by meeting certain income requirements, but if you do, bankruptcy legally erases any debts the trustee can't pay through liquidation. The bankruptcy process discharges them and you're not liable for paying them any longer – unless you reaffirm them.

Do You Have to File on Everything When You File for Chapter 13?

Bankruptcy isn't a pick-and-choose answer to financial problems. If you owe a debt – even if it's just $50 to your Aunt Rose – the law obligates you to include it in your petition. This is true even if you file for Chapter 13. Your creditors usually receive at least some of what you owe, so you can't unfairly prejudice any of them by leaving them out.


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