How Often Can You File for Bankruptcy

Bankruptcy is a terrible situation that many people underwent during the economic recession that hit the economy of the United States in the financial year of 2008 and 2009. This horrible period saw an extensive rise in the number of insolvencies and foreclosures. The number of people filing for bankruptcy drastically rose as well.

What is Bankruptcy

Financially speaking, bankruptcy occurs when the number of debts that the person owes, exceeds the number of assets that he owns. There are several different types of bankruptcy, such as the chapter 7 bankruptcy, or chapter 13 bankruptcy. The chapter 7 bankruptcy is probably the most common type of bankruptcy that is filed for. A bankruptcy is usually filed for by the person himself. In some cases, the creditors have also petitioned to the court for the bankruptcy filing.

How Often Can You File for Bankruptcy

The title 11 of the United States Code, states the provisions under which bankruptcies are filed. This code also specifies that rules and regulations, and also bankruptcy law of the United States. Provisions regarding bankruptcy and types of bankruptcy was modified in the October of 2005. The following are some of the provisions that would provide some clues to the frequency of filing for bankruptcy.

According to the code and modifications, the debtor who is filing for bankruptcy or has been petitioned as insolvent can file for a chapter 7 or chapter 13 bankruptcy as many times as he wants. However in case if he is filing for a chapter 7 bankruptcy. The debts of the debtor in such a situation debts are not discharged, if he has filed for bankruptcy, in the past 8 years (chapter 7) or in past 6 years (for chapter 13). A similar condition is seen in another clause that refers to the Chapter 13 bankruptcy, according to which the debtor cannot obtain a discharge from all his debts (in accordance with Chapter 13), if he has already filed for a Chapter 7 bankruptcy in the past 4 years, or has filed for chapter 13 in the past 2 years.

How Often Should You File for Bankruptcy

As mentioned above, theoretically one can file for bankruptcy as many times one wants. However, there are many effects of the proceedings that have to be taken into consideration, before one files for another bankruptcy. According to most bankruptcy scholars, one should not file for a bankruptcy for at least 5 years. This is due to the fact that the court may not discharge the debts, or also may not bring a stay on the debts that are due. If you have filed for a chapter 7, then you will probably need to wait for at least for 5 years before you file for another one. The proceedings of chapter 13 and chapter 11 last for about 3 to 5 years, during which one cannot file for a bankruptcy. In case if you want a total discharge, from the debts, then one can file for a second bankruptcy, after 8 years. In cases of emergencies, a person who has filed for a chapter 7 can file for a chapter 13 before the lapse of 8 years and receive a stay on debts.

Before actually filing for bankruptcy, one must always reconsider, as it drastically affects the credit report as well as the credit history.