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If you have filed for bankruptcy before but you’ve found yourself in financial dire straits again, you may want to know how often you can file for bankruptcy.
Bankruptcies are more common than you might think, and the number of bankruptcies filed in the United States between April 2018 and March 2019 was 772,646. Filing for bankruptcy can present an option for helping you get back on your feet financially. If you are considering filing for bankruptcy again, you are not alone.
Filing for bankruptcy multiple times is not unusual. Even Donald Trump’s businesses have filed for bankruptcy more than once. Let’s examine at how often you can file for bankruptcy.
You Can File for Bankruptcy as Many Times as You Like
If you have run into financial difficulties before and filed for bankruptcy, you’ll know the advantages it can give you. If you are unable to pay your debts, bankruptcy gives you the option to start resolving your financial difficulties and rebuilding your credit.
You may have already filed for bankruptcy but are experiencing financial problems again. In this situation, it can be tempting to file for another bankruptcy. However, filing for a second or even third bankruptcy is not the same as filing the first time.
Every year hundreds of thousands of Americans file for bankruptcy. Most people who file for bankruptcy use a lawyer to help them through the process. The legal process can be complicated and to ensure you get all your entitled benefits it is a good idea to research bankruptcy law on a site like Alllaw.com.
Where Can You Look for Advice on Filing for Bankruptcy?
- AllLaw: is a free online resource that aims to help users in all their legal needs. They have a large amount of information covering bankruptcy, the types of bankruptcy, and how to file for bankruptcy. They can also help you find an expert attorney in your area who can assist you in filing for bankruptcy in the correct and most beneficial way.
- Bankruptcy Options Center: This is a free online resource that helps visitors establish what the available bankruptcy options are.
- Debt.org: An organization that aims to help Americans who are struggling with debt. They provide information on debt consolidation, settlement, student loans, bankruptcy and mortgages.
- LegalZoom: This is an online legal technology company. They help users create legal documents without the help of an attorney and have some great resources to help you understand the law. LegalZoom has a section of its site dedicated to bankruptcy.
All these sources confirm that you can file for bankruptcy as often as you want. But this doesn’t mean that your debt will always be wiped clean. You need a discharge from the court to relieve you from your obligation to pay a debt but receiving this will depend upon the type of bankruptcy you file for.
If your aim is to wipe the slate clean and start again, what you should really be asking is not how often you can file for bankruptcy, but how often you can be discharged.
What Are the Most Common Causes of Bankruptcy?
According to the Institute for Financial Literacy, in 2010, the most common reasons for filing for bankruptcy in the U.S. were:
- Overextended credit: Seriously overextended credit is when your credit is larger than you can repay. Often, this is caused by overspending or being unable to pay your debts.
- Reduced income: Layoffs and job terminations have a huge impact on your income. Even if you find a new source of income, if you spend a long time without being gainfully employed you may not be able to recoup the funds to keep creditors at bay.
- Unexpected expenses: Life can hit you with all kinds of surprises. Unfortunately, if you are not financially prepared for them, you may not be able to keep up with your debt repayments. A study by Harvard University found that the biggest cause of bankruptcy, representing 62% of all personal bankruptcies, is for medical expenses. If you have a sudden illness or injury your medical bills can rack up quickly and may mean you want to file for bankruptcy.
How Often Can You Be Discharged in Personal Bankruptcy?
There are several different types of bankruptcy you can file for. Each one is a little different and has different rules regarding discharge. For most personal bankruptcies, debt can be discharged with the exceptions of student loans and tax debts.
The rules for discharge are:
- Chapter 7: If you have already filed for a Chapter 7 bankruptcy, a bankruptcy court will deny your request for discharge if you have been given a discharge from a previous Chapter 7 or Chapter 11 in the last eight years.
- If you have been given a discharge in a Chapter 12 or Chapter 13 bankruptcy case within the last six years, you will also be denied a Chapter 7 discharge.
- Chapter 13: If you have been given a discharge in a prior Chapter 7, 11 or 12 case, which was filed within the last four years, you will be denied a Chapter 13 discharge. The same applies if you have been awarded a discharge for a Chapter 13 case within the past two years.
These time limits only apply to discharges and not to bankruptcy filings. There is no minimum period you must wait to file for another bankruptcy. If you really want, you could file for another bankruptcy the day after your first one. However, filing too soon will affect how your debt is resolved and you may not be given discharge.
Bankruptcies Can Be Revoked – Seek Legal Advice
Bankruptcy courts have the right to revoke a bankruptcy or discharge. There are specific conditions for the various types of bankruptcy. Chapters 7, 11, 12 and 13 all have their own unique reasons for why they can be revoked.
Revocation of Chapter 7
A trustee, creditor, or the U.S. trustee may submit a request to the bankruptcy court that a discharge or bankruptcy be revoke based on an allegation against the debtor.
Explanations of the Reasons Bankruptcies Can Be Revoked:
- Defraud: Transferring, concealing or moving property or money will land you in a lot of trouble. This is considered bankruptcy fraud and can incur serious penalties along with having your discharge revoked.
- Concealing or destroying information: Keep all records of your finances safe and secure. You will need them during the legal proceedings – concealing or destroying them can lead to your bankruptcy being revoked.
- Lies: It should go without saying that lying in court is a terrible idea. Giving any false information to a judge will incur a perjury charge and will not only revoke your bankruptcy but can also lead to imprisonment.
- Lost assets: This refers to any time that you cannot sufficiently explain a loss in your assets.
- Non-compliance: Not complying with any court order you are given is a criminal offence.
- Failure to take an instructional course: When filing for bankruptcy you are legally required to take two instructional courses regarding finances. The aim of this is to help you manage your finances better in the future and prevent another bankruptcy. The first one covers credit counseling and the second financial management.
If you are considering filing for bankruptcy again, then you should take advice. You’ll need to file with the court and must be certain that (a) you are filing correctly and (b) discharges are applicable.
You should also be aware of the With Prejudice rulings, and how they affect your ability to file for bankruptcy.
AllLaw has excellent resources online to help you navigate this tricky legal procedure. They have an interactive calculator that can help you establish the best next step based on the amount of money you owe. Their resource also clearly and simply explains the various types of bankruptcy and what you can do if the court has dismissed a previous case with prejudice.
Don’t Ask How Often You Can File for Bankruptcy. Ask How Many Times You Can Be Discharged
If you have already filed for bankruptcy and are thinking about filing again, the question you should be asking is not ‘How many times can I file for bankruptcy?’ but ‘How many times can I have a personal bankruptcy discharged?’
It is possible to file for multiple bankruptcies but being discharged is strictly administered. You must meet certain requirements and the timing can often be tricky. If you are considering filing for bankruptcy it is critical that you seek legal advice.
An experienced bankruptcy lawyer will be able to advise you on the best sources of action to take and help you file for a bankruptcy that is most beneficial for your situation.