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Bankruptcy Law Blog

Sunday, March 26, 2017

How Many Times Can You File For Bankruptcy?

How Many Times Can You File For Bankruptcy?

During the recent presidential campaign, now-President Trump’s multiple bankruptcies were discussed quite a few times. He made it clear that he has never filed for personal bankruptcy, but that he has been more than happy to take advantage of the bankruptcy laws when his businesses were in trouble. In fact, Trump-owned businesses have filed for bankruptcy four times.

When the news started to spread that Trump’s businesses had filed for bankruptcy more than once, several people reached out to our firm and asked if filing for bankruptcy multiple times was something “normal people,” aka not billionaires, could do. The short answer is yes, you can file for bankruptcy as many times as you need to.

However, if you discharged some of your debt the last time you filed for bankruptcy, you will not be able to discharge more debt for a certain number of years. The amount of time it takes to be eligible for another discharge of debt depends on the type of bankruptcy you filed previously, and the type of bankruptcy you wish to file this time.

The Different Types of Bankruptcies

There are two main types of personal bankruptcy, Chapter 7 bankruptcy and Chapter 13 bankruptcy.

Chapter 7 bankruptcies are “fresh start” bankruptcies. In a Chapter 7 all of your unsecured debts such as credit cards and medical bills are eliminated.

Chapter 13 bankruptcies have a repayment plan at their heart. If you make all of your payments during the repayment period, some of your debts can be discharged.

The Second (Or Third, Or…) Time Around

If You Previously Filed Under Chapter 7

If you previously got your debts discharged during a Chapter 7 bankruptcy, you must wait 8 years from the date of your previous filing to file under Chapter 7 again if you want to discharge any debt.

If you want to file under Chapter 13 this time around, you need only wait 4 years after filing a Chapter 7 bankruptcy to qualify for a discharge. All in all you will end up going 8 or more years between discharges since Chapter 13 bankruptcies include a repayment process that lasts a minimum of 4 years.

If You Previously Filed Under Chapter 13

If you previously discharged some debts through the Chapter 13 bankruptcy process, you must typically wait 6 years from the date of your filing to qualify for a discharge under Chapter 7. However, if you paid 100% of the debt owed to your unsecured creditors during your Chapter 13 bankruptcy, or you paid at least 70% of the claims in you Chapter 13 case and you proposed the plan in good faith and used your best effort to repay creditors, you can file virtually immediately.

If you want to file under Chapter 13 again, you must wait 2 years to qualify for another discharge.

Don’t Hesitate To Ask For Help

The timing issues in bankruptcy cases can be tricky, so if you have questions about when to file for bankruptcy, and what chapter would be best to file under, don’t hesitate to contact our firm.

 


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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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