If you declare bankruptcy, you can clear some of the debts that you have and create a much different financial future. Chapter 7 bankruptcy does this by liquidating non-exempt assets, while Chapter 13 does it by creating a monthly repayment plan.
But if you have already declared bankruptcy, does that mean you cannot do so again? Or are you allowed to declare bankruptcy repeatedly if your financial future does not turn out the way that you had hoped and you find yourself running into overwhelming debt once again?
The minimum waiting period
You can often declare bankruptcy multiple times, and there is no upper limit on how many bankruptcy filings you can have in your life. However, there are minimum waiting periods between filings, depending on which type of bankruptcy you filed previously and which type you want to file in the future.
If you file Chapter 7, for instance, you have to wait eight years to file Chapter 7 again. But you would only have to wait four years if you wanted your second filing to be Chapter 13.
If your first filing was Chapter 13, on the other hand, you would have to wait just two years to file for Chapter 13 again. But if you wanted to file for Chapter 7 the second time, then you would have to wait up to six years, though there are some exceptions based on when the previous bankruptcy was discharged.
Exploring your options
This helps to demonstrate how bankruptcy can be a useful financial tool during your life and also shows some of the restrictions on how you can use it. It is important to understand all of your legal options as you go through this process.