One of the most common questions I hear from prospective clients is:

“I filed bankruptcy before. Can I file again?”

Many people believe that bankruptcy can only be filed once every seven years. Others think that once they have filed bankruptcy, they can never file again. Neither belief is correct.

The truth is that there is no limit on the number of bankruptcy cases a person may file during his or her lifetime. The real issue is whether the debtor is eligible for another discharge and whether there are any restrictions arising from a prior bankruptcy case.

The Origin of the “Seven-Year Rule”

The idea that bankruptcy can only be filed every seven years likely has two sources.

First, the Bible contains references to the forgiveness of debts during a seven-year cycle. In the Book of Deuteronomy, creditors were instructed to release certain debts every seven years. While these biblical concepts influenced society’s historical views regarding debt relief, modern bankruptcy law is governed by federal statutes enacted by Congress.

Second, bankruptcy laws have historically imposed waiting periods between discharges. Prior versions of the Bankruptcy Code required debtors to wait six years between Chapter 7 discharges. Today, the waiting period is generally eight years. Over time, these rules became simplified into the common but inaccurate statement that a person can file bankruptcy only once every seven years.

There Is No Lifetime Limit on Bankruptcy Filings

Many people are surprised to learn that the Bankruptcy Code does not limit a person to a single bankruptcy filing.

Life happens. People lose jobs, suffer illnesses, experience divorces, face unexpected business failures, or encounter economic downturns. Congress recognized that financial hardship can occur more than once.

As a result, an individual may file multiple Chapter 7 or Chapter 13 cases during his or her lifetime so long as the eligibility requirements are satisfied.

In my practice, I regularly meet clients who successfully rebuilt their finances after a prior bankruptcy only to face a new financial crisis years later. The fact that someone filed bankruptcy in the past does not mean they are forever barred from seeking relief again.

What If My Prior Bankruptcy Case Was Dismissed?

A dismissal is different from a discharge.

When a bankruptcy case is dismissed, the court closes the case without granting the debtor a discharge of debts. Common reasons include:

• Failure to pay the filing fee.
• Failure to file required documents.
• Failure to attend the Section 341 Meeting of Creditors.
• Failure to complete a required bankruptcy course.
• Failure to make Chapter 13 plan payments.

Dismissal for Failure to Pay the Filing Fee

One of the most common dismissals occurs when a debtor files a bankruptcy petition but is unable to complete the installment payments required for the filing fee.

In most situations, the debtor may simply file a new bankruptcy case once the filing fee issue has been resolved.

However, repeat filings can affect the automatic stay. If one or more bankruptcy cases were dismissed within the previous year, the protection provided by the automatic stay may be limited or may require a court order to remain in effect.

Other Dismissals

Most routine dismissals do not permanently prevent a future bankruptcy filing. However, certain dismissals involving bad faith conduct can result in temporary filing bars imposed by the bankruptcy court.

For this reason, it is important to review the circumstances surrounding any prior dismissal before filing another case.

What If My Prior Case Was Closed Without a Discharge?

Sometimes a bankruptcy case is closed without a discharge being entered.

One common example occurs when a debtor fails to complete the required financial management course after filing bankruptcy.

When a case closes without discharge, the debtor remains liable for the debts that would otherwise have been discharged.

In some situations, the best solution may be to reopen the prior case and obtain the missing discharge. In other cases, filing a new bankruptcy case may be the better option.

The answer depends upon the specific facts and timing involved.

How Long Must I Wait Between Bankruptcy Discharges?

The waiting periods depend on the chapter previously filed and the chapter being filed now.

Chapter 7 After Chapter 7

A debtor who previously received a Chapter 7 discharge must wait:

Eight years from the filing date of the prior Chapter 7 case before receiving another Chapter 7 discharge.

Example:

• Prior Chapter 7 filed January 1, 2018
• New Chapter 7 eligible for discharge if filed on or after January 1, 2026

This is the rule that often gives rise to the “every seven years” myth.

Chapter 13 After Chapter 7

A debtor who received a Chapter 7 discharge may file a Chapter 13 case at any time.

However, to receive a discharge in the Chapter 13 case, the debtor generally must wait:

Four years from the filing date of the Chapter 7 case to the filing date of the Chapter 13 case.

Even when a discharge is unavailable, a Chapter 13 can still be extremely useful to:

• Stop a foreclosure.
• Catch up mortgage arrears.
• Prevent vehicle repossession.
• Pay tax debt over time.
• Manage nondischargeable obligations.

Chapter 13 After Chapter 13

A debtor who previously received a Chapter 13 discharge must wait:

Two years from the filing date of the prior Chapter 13 case before receiving another Chapter 13 discharge.

Because most Chapter 13 plans last between three and five years, this waiting period is rarely an obstacle.

Chapter 7 After Chapter 13

Generally, a debtor must wait:

Six years from the filing date of the prior Chapter 13 case before receiving a Chapter 7 discharge.

However, there are important exceptions.

The six-year waiting period does not apply if:

• The Chapter 13 plan paid 100% of allowed unsecured claims; or
• The debtor paid at least 70% of allowed unsecured claims, proposed the plan in good faith, and made his or her best effort to complete the plan.

Many debtors who successfully complete Chapter 13 plans therefore qualify for Chapter 7 relief sooner than they expect.

Bankruptcy Eligibility Is More Complicated Than a Calendar

The timing rules discussed above relate primarily to discharge eligibility. Other issues may also affect a person’s ability to file another bankruptcy case, including:

• Prior dismissals.
• Multiple filings within a short period of time.
• Limitations on the automatic stay.
• Eligibility for Chapter 13 debt limits.
• Means Test qualification in Chapter 7 cases.

This is why it is important to have an experienced bankruptcy attorney review your prior filing history before making assumptions about eligibility.

Frequently Asked Questions

Can I file Chapter 7 bankruptcy twice?

Yes. There is no limit on the number of Chapter 7 cases you may file during your lifetime. However, you generally must wait eight years between Chapter 7 discharges.

Can I file bankruptcy more than once?

Yes. Many individuals file bankruptcy more than once due to new financial hardships that arise years after their previous case.

What if my prior bankruptcy was dismissed?

In many situations, you may file another bankruptcy case immediately. However, prior dismissals can affect the automatic stay and may require additional court proceedings.

What if I never received a discharge?

A bankruptcy case that closed without discharge presents unique issues. Depending on the circumstances, it may be possible to reopen the prior case or file a new bankruptcy case.

Can I file bankruptcy after a Chapter 13?

Yes. Whether you can obtain a discharge depends upon when the Chapter 13 case was filed, whether you completed the plan, and the chapter you intend to file next.

The Bottom Line

The belief that bankruptcy can only be filed once every seven years is a myth. Likewise, filing bankruptcy once does not prevent you from ever filing again.

The Bankruptcy Code permits multiple bankruptcy filings throughout a person’s lifetime. The critical questions involve the type of prior bankruptcy, whether a discharge was received, whether the case was dismissed, and how much time has passed since the earlier filing.

If you have filed bankruptcy before and are wondering whether you qualify again, an experienced bankruptcy attorney can review your filing history and explain your options.

At the Law Offices of Walter Metzen, we help individuals and families throughout Metropolitan Detroit determine whether they qualify for Chapter 7 or Chapter 13 bankruptcy protection and obtain the fresh start that Congress intended.