Every year, hundreds of thousands of Americans file for individual bankruptcy. 2020 actually saw fewer bankruptcy filings than recent years, with around 520,000 as compared to the 750,000+ filings per year from 2016 through 2019. Regardless, the implication is clear: Bankruptcy is incredibly common and reflects the realities of the modern economy. It’s an important, if unfortunately necessary, legal tool for people to obtain debt relief and work toward financial freedom. For some debtors, however, a single bankruptcy might not be enough to fully get their feet under them. If you filed for bankruptcy already, how soon can you file again?

Technically, You Can File Again Immediately, But You Can’t Discharge

Bankruptcy law does not actually set a minimum period of time you must wait before filing for bankruptcy a second time. Technically, you could file for bankruptcy a week after receiving your initial Chapter 7 bankruptcy discharge. In practice, however, there’s little benefit to filing again so soon.

Although you can file for subsequent bankruptcies without waiting, you will not be eligible for the actual discharge of debt. The principal benefit of filing for Chapter 7 bankruptcy is discharging your covered debt, leaving you free and clear to start fresh. Chapter 13, likewise, offers a pathway toward repaying a portion of your debt, with the remaining, covered, unpaid portion discharged at the end of the repayment period. If you are looking to discharge your debt, you will have to wait the appropriate amount of time.

Which Chapter is Your Bankruptcy?

If you are considering bankruptcy for the second time, you’ll need to wait a sufficient amount of time from your initial case in order to obtain a second debt discharge. The amount of time you’ll need to wait depends on which type of bankruptcy you initially filed under, and which type of bankruptcy you are seeking the second time around.

Assuming you are filing under either Chapter 7 or Chapter 13, which are the most common forms of individual consumer bankruptcy, the time limits are as follows:

• To file for a second Chapter 13 bankruptcy after a previous Chapter 13 bankruptcy, you’ll need to wait two years.
• To file for a Chapter 13 bankruptcy after a previous Chapter 7 bankruptcy, you’ll need to wait four years.
• To file for a second Chapter 7 after a previous Chapter 13 bankruptcy, you’ll need to wait six years.
• To file for a second Chapter 7 after a previous Chapter 7 bankruptcy, you’ll need to wait eight years.

The time limits start on your initial filing date; for example, you can file for Chapter 7 a second time eight years after initially filing under Chapter 7.

There are certain caveats, however, that can make life a bit easier. You don’t need to wait the six years between your Chapter 13 and Chapter 7 bankruptcy filings if you fully paid off your unsecured creditors during your Chapter 13 repayment period, or if you paid at least 70 percent of your claims, your plan was proposed in good faith, and you made your best effort to pay off all of your unsecured debts. If a greater chunk of your Chapter 13 debt was discharged, however, then you’ll need to wait the full six years.

Moreover, if you did not receive a discharge in your first case, you can generally file again and receive a discharge. If your initial case was dismissed, you may be able to file again after a court-mandated waiting period. If your original discharge was denied by the court, you can file again, but you likely will be unable to obtain a discharge of the debt covered by your first bankruptcy.

Is it Worth Filing Again Even Without the Discharge?

The discharge is not the only benefit to bankruptcy. Filing for Chapter 13 bankruptcy gives you additional time to pay off your debt while avoiding collection efforts such as wage garnishment. If you have additional debt not covered by your original bankruptcy discharge, such as student loans, alimony payments, or back taxes, a subsequent Chapter 13 bankruptcy can significantly lower your monthly burden and give you either three or five years to get your finances under control. Filing for Chapter 13 soon after Chapter 7 might also help you avoid foreclosure if you’re behind on your mortgage.

There are many reasons to file for bankruptcy and just as many approaches to finding the right type of debt relief for your circumstances.