Ask Dr. Don By Don Taylor, Ph.D., CFA • Bankrate.com

Filing bankruptcy more than once

Dear Dr. Don,
Can you file for bankruptcy more than once? If so, how long do you have to wait before filing again?
Katherine Chapters

Dear Katherine,
You can file for bankruptcy more than once. How long you have to wait between bankruptcy filings depends on the type of bankruptcy you filed last. You can file a Chapter 13 case at any time.

You can't file a Chapter 7 (liquidation) case if your eligible debts were discharged in the past six years under either a Chapter 7 or Chapter 13 bankruptcy filing with two exceptions. The U.S. Courts' Web site offers a pamphlet, Bankruptcy Basics, which discusses a second Chapter 7 filing and the two exceptions:

A discharge will be denied in a later Chapter 7 case if the debtor has been granted a discharge under Chapter 7 or Chapter 11 in a case filed within six years before the second petition is filed. The debtor will also be denied a Chapter 7 discharge if he or she previously was granted a discharge in a Chapter 12 or Chapter 13 case filed within six years before the date of the filing of the second case unless:

(1) all the "allowed unsecured" claims in the earlier case were paid in full, or
(2) payments under the plan in the earlier case totaled at least 70 percent of the allowed unsecured claims and the debtor's plan was proposed in good faith and the payments represented the debtor's best effort.

Debtors sometimes file for Chapter 13 on the heels of a Chapter 7 bankruptcy discharge to structure a repayment plan to pay off any remaining debts. This process is commonly called a Chapter 20 bankruptcy because you've added a Chapter 13 bankruptcy to your Chapter 7 filing. You can't actually file a Chapter 20 bankruptcy petition.

-- Posted: Sept. 25, 2003