Bankruptcy myth: You can only file once

False!

The Bankruptcy Code was developed to provide hardworking Americans a chance to reduce or eliminate their debt and gain a fresh start. And while many consider bankruptcy a final option on the road to financial stability, they might not realize that the process can be repeated in the future.

While there are numerous options for debt relief, the most common are either Chapter 7 or Chapter 13 bankruptcy. Based on assets, personal factors and goals, individuals can purse either debt elimination through Chapter 7 or debt reorganization through Chapter 13. After debts are discharged, individuals can immediately begin rebuilding their credit and working toward a fresh financial future. Many individuals believe, however, that they can only file once will often hold off on pursuing bankruptcy – or even ignore that option completely.

You can file more than once

It is not uncommon for people to face financial difficulties again and again in life. Individuals might have chronic medical conditions that amass enormous debt, for example. To learn more about how bankruptcy impacts your unique circumstances, it is wise to talk to an attorney, however, there are some factors to know, including:

  • Chapter 7 bankruptcy can be filed as many times as you’d like with one caveat: the filing dates must be at least 8 years apart.
  • If you filed Chapter 13 and successfully completed your repayment plan, there are generally less time restrictions on filing again. Commonly, once the repayment period has ended, you can file again, but it is important to consult with a lawyer.
  • Based on certain factors, you might be able to file a Chapter 7 after a Chapter 13. Again, it is always encouraged that you work with an experienced professional so no mistakes in planning are made.

While the Code is designed to provide a financial fresh start, it is crucial that you understand the limitations therein. For example, failing to successfully complete the repayment plan developed for a Chapter 13 can extend the waiting period before you can file again. Do not hesitate to discuss your unique financial goals with an experienced bankruptcy attorney.