Dealing with debt is not enjoyable. Many individuals spend much of their adult life attempting to get out of debt. While some debt is understandable and not considered bad debt, such as a home mortgage or student loans, when an individual is overcome with a wide variety of debts, it can feel endless and impossible to get out of.
Filing for bankruptcy is a resourceful option and lifeline if you are drowning in debt. Nonetheless, it does have some setbacks, such as damaging your credit score and the inability to borrow money for several years.
While many seek to avoid filing for bankruptcy at all costs, some not only go through the process once but also seek to go through it again.
Filing for bankruptcy more than once
When asking how many times a person can declare bankruptcy, the simple answer is that there is no limit. However, there is a limit to how often an individual can file for bankruptcy. If you are wondering how long you must wait, that is dependent on the type of bankruptcy you most recently filed and the type of bankruptcy you intend to file.
Generally, there are two types of bankruptcy available for individual filers. This includes Chapter 7, which involves the selling of non-exempt assets to address your debts, and Chapter 13, which allows you to retain your assets and enter a repayment plan that last three to five years.
With regards to waiting periods for bankruptcy filings, there are four combinations to consider. First, if you most recently filed for Chapter 7 and seek to file for Chapter 7 again, the waiting period is eight years. Next, if you most recently filed for a Chapter 7 bankruptcy and now seek to file for Chapter 13, you will need to wait four years. Third, if you recent filing was Chapter 13 and you intend to file for Chapter 7, there is a waiting period of six years. Finally, if you seek to file for Chapter 13 following a Chapter 13, a two-year waiting period is required.
Although a resourceful tool to address overwhelming debt, filing for bankruptcy can be complex. As such, it is important that you fully understand your situation, legal rights and options before moving forward with a filing.