Bankruptcy filings dropped during the height of the pandemic, but they are rising once again. A cost-of-living crisis and the looming threat of a recession have Americans heading back to bankruptcy court, with filings approaching pre-pandemic levels. For many people, it’s their first time declaring bankruptcy. But others have been down that road before. That may leave you wondering how many times you can file bankruptcy.

The simple answer is there’s no set limit on how many times someone can file for bankruptcy. But the reality is more complex. Let’s dive in.

Types of Bankruptcy

The two most common types of bankruptcy are Chapter 7 and Chapter 13. Chapter 7 is what most people think of when they hear the word “bankruptcy.” It allows consumers to discharge most or all their unsecured debt, giving them a financial “fresh start” and relieving the burden of unmanageable debt.

Chapter 13 bankruptcy is different. Rather than discharging debts in full, it restructures them into a more manageable plan that allows borrowers to pay them off in three to five years. In some cases, a Chapter 13 repayment plan may be discharged early if the consumer is experiencing extreme financial hardship

How Many Times Can You File Bankruptcy?

As mentioned previously, there is no limit to the number of times someone can declare bankruptcy. But it’s not a free-for-all. There are waiting periods between how often you can file depending on the type(s) of previous filings and the results.

Waiting Periods

The time you’re required to wait between bankruptcy filings depends on the type(s) of bankruptcy you file and the discharge decision. Here are the general rules: 

Chapter 7 After Chapter 7: 8 Years

The longest you will need to wait between bankruptcy filings is eight years. If your Chapter 7 bankruptcy filing resulted in your debts being discharged, you can’t file for Chapter 7 again for a minimum of eight years.

Note: the clock starts ticking from the date of the original filing, not the decision date.

Chapter 7 After Chapter 13: 6 Years

If you need to file Chapter 7 bankruptcy after filing Chapter 13, you’ll generally need to wait six years. The court may make an exception if you paid your restructured plan in full, or paid at least 70% of the plan if you can show evidence you made a good faith plan to pay in full but ran into unforeseen financial hardship.

Chapter 13 After Chapter 7: 4 Years

There’s a waiting period of four years before you can file Chapter 13 bankruptcy after filing Chapter 7. However, there is one significant exception. You may be able to file Chapter 13 immediately following a Chapter 7 filing if you do so to repay the debts that weren’t discharged in the initial filing.

Chapter 13 After Chapter 13: 2 Years

The shortest waiting period between filings is two years between Chapter 13 filings. This an unlikely scenario though, since most court-approved restructuring plans take from three to five years to complete.

If you’re struggling to pay back the restructure, the court is more likely to discharge the remaining debt, rather than restructuring it further with another Chapter 13 filing.

Is it Bad to File Bankruptcy More than Once?

Bankruptcy is a tool to help people regain financial stability. Filing more than once isn’t necessarily bad, but because it can have long-lasting effects on credit, it’s not a tool you want to overuse.

Needing to file bankruptcy multiple times could be a sign of a deeper problem with overspending and money management. If you find yourself in the position of feeling like multiple bankruptcies are your only option, you’ll want to take a long, hard look at your lifestyle and spending habits to determine how you ended up in that situation.

Bankruptcy Alternatives

Bankruptcy isn’t the only solution to overwhelming debt. There are other effective choices to help you pay off debt that won’t have the lingering effects on your credit that bankruptcy will. Some alternatives to consider include:

• Debt Consolidation via loan or balance transfer
• Credit Counseling & a Debt Management Plan
• Debt Settlement

Next Steps

If you want to further explore the possibility of declaring bankruptcy, speak with a qualified bankruptcy attorney who can offer expert guidance throughout the process, which includes pre- and post-filing financial education courses.