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How Often Can You File for Bankruptcy

How Often Can You File for Bankruptcy

In the wake of the recession that hit the world in 2008, courts throughout the United States saw a terrible rise in the rate of bankruptcy filings. Bankruptcy is a situation where a person becomes insolvent and is unable to repay any of his debts. A certain provision in the United States code permits indefinite amounts of bankruptcy filing.
Scholasticus K
Bankruptcy is a terrible situation that many people underwent during the economic recession that hit the United States in the financial year of 2008-2009. 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 Chapter 7 bankruptcy, Chapter 11, Chapter 12, and Chapter 13 bankruptcy. 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?

Title 11 of the United States Code states the provisions under which bankruptcies are filed. This code also specifies the rules and regulations, and also the bankruptcy law of the United States. Provisions regarding bankruptcy and types of bankruptcy were modified in October 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, a 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 such cases, the debts are not discharged if he has filed for bankruptcy in the past 8 years (Chapter 7) or in past 6 years (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.

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 at least 5 years before you file 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 of the person.