There are several types of bankruptcies to file in California. In the same way, there are several rules on how and when one can file a bankruptcy petition. Generally, the California bankruptcy law does not limit anyone on the number of times they can apply for bankruptcy. But, there should be a waiting period between one filing and another, ranging between two and eight years. The time length will depend on the bankruptcy type you choose to file.

When filing for bankruptcy, you must be careful to achieve the desired outcome. If you file soon after the previous filing, you will not be eligible for debt discharge. It means that you will have more in debt to repay. Filing too soon after the last time could also waste your money and time. It helps to know how to time your filing. For more information and guidance, contact an experienced bankruptcy attorney.

Understanding How Many Times You Can Apply for Bankruptcy

Generally, you can apply for bankruptcy as many times as you wish. The law does not limit how many times a person can file a bankruptcy petition in their lifetime. However, bankruptcy laws limit how soon you can do it. It provides time limits within which you could apply for bankruptcy after a previous filing if you did not receive debt elimination or total discharge of your debts in the prior filing.

If you have already filed for bankruptcy, your worry should not be on whether you can file again in the future but on how frequently you can do it. The time you can take to file again will depend on the bankruptcy type you previously filed, whether Chapter 11, 7, or 13. Chapters 7 and 13 are the most common in California for individuals who wish to obtain relief from debts. The waiting period for the two bankruptcy Chapters is different.

However, waiting periods only apply if you successfully discharge your debts in the prior filing. Debt discharge in bankruptcy is the process that frees you from some debts in your case. It gives you relief that eliminates your obligation to repay discharged debts. You do not need to delay applying for bankruptcy again if the court dismissed your previous filing and did not discharge your debts. You can file as soon as possible without taking much time after the previous filing. However, ensure that you did not do the following within the last 180 days:

  • Disobeying a court order, leading to a dismissal of your bankruptcy case
  • Failing to make court appearances as ordered by the judge, which led to a dismissal of your case
  • Voluntarily obtaining a dismissal of your bankruptcy case

How Many Times You Can Apply for Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the liquidation bankruptcy, which involves liquidating some of your assets, then selling them off to pay your debts. It is the most appropriate bankruptcy type for debtors with enough assets to cover some or all of their debts. It is quicker to become debt-free since your obligations end once you pay off your debts.

If you had previously filed Chapter 11 or 7 bankruptcy and would like to apply for a Chapter 7 bankruptcy, the law requires you to wait eight years from your previous filing. You can also apply for Chapter 11 bankruptcy to reorganize your finances, though business people most prefer this bankruptcy type.

It will be a little complicated if you had previously filed for Chapter 13 but wanted to file Chapter 11 or 7. If that is your case, the guidelines will be as follows:

  • You would not experience a waiting period to file a Chapter 7 if you paid all your creditors in your previous Chapter 13 filing.
  • You would not experience a waiting period to file for Chapter 7 bankruptcy if you paid at least 70% of your creditors. Your debt payment strategy must have been a proposal in good faith that represented your best effort. In this case, 'best effort' shows that you used much of your available income to pay off your debts.
  • You will experience a waiting period of six years to file Chapter 7 bankruptcy if your previous filing was Chapter 13, whereby you paid not more than 70% of your creditors.

How Many Times You Can File Chapter 13 Bankruptcy

Chapter 13 involves devising a payment plan through which you will pay off all your debts within a given period. Your income usually funds the payment plan.

If you wish to file Chapter 13 but had previously filed a Chapter 7 bankruptcy, the law requires you to wait for a minimum of four years from your previous filing. But, if the last filing was a Chapter 13 bankruptcy, but you wish to apply for Chapter 13 again, the waiting period will drop to a minimum of two years after the previous filing.

Remember that even though the law provides a wait time from one bankruptcy filing to another, you are not limited to the number of times you can apply for bankruptcy. But, bear in mind the negative implications of filing for bankruptcy, especially on your credit. Each filing damages your credit. If you file a bankruptcy petition several times, you will prolong the bankruptcy implication on your credit. That will affect your future efforts to obtain credit.

A Chapter 7 bankruptcy record stays on credit reports for up to ten years from your filing date, and a Chapter 13 stays up to seven years. Your credit score is usually based on information provided on the credit report. A bankruptcy will continuously impact your score until it is removed. Your credit score could remain low for up to ten years. If you continue filing for bankruptcy, it could stay down for several more years.

Double Filing in Bankruptcy

Double filing occurs when you decide to file for Chapter 13 soon after a successful Chapter 7 filing. It is informally called filing a Chapter 20 bankruptcy. It is an unofficial provision of the Bankruptcy Code in the United States. However, it is allowed as long as you meet all other requirements mentioned above.

Double filing comes with several benefits and setbacks, which you must understand to make an informed decision.

The Benefits of Double Filing

The main benefit of double filing is that you can repay more debts over time than when you file a single case of Chapter 13 or Chapter 7. It applies to people who have more obligations to pay but have limited resources to enable them to pay off all their debts with only one bankruptcy filing. In that case, you can file for bankruptcy in Chapter 13 right after Chapter 7.

A Chapter 7 bankruptcy helps you pay off your unsecured debts like credit cards and medical debts. A Chapter 13 bankruptcy will allow you to devise a payment plan of up to five years through which you can pay off most of your unsecured and secured debts.

Filing first for Chapter 7 bankruptcy decreases your debts, making you more eligible for Chapter 13 bankruptcy. You are only eligible for Chapter 13 bankruptcy if your debt falls within a specific limit, possibly by a previous Chapter 7 bankruptcy. Additionally, filing a Chapter 13 bankruptcy soon after Chapter 7 gives you enough time to update your overdue obligations, like car payments and mortgages.

Here are the benefits of double filing in greater detail:

  • Double filing helps you pay off more debts in the long run, even though it will take more time and more than one filing
  • It also enables you to decrease your debts first so that you can be eligible for Chapter 13 bankruptcy
  • The double filing allows you adequate time to stay up to date with your overdue debts

The Disadvantages of Filing Twice

Some disadvantages of applying for bankruptcy twice that you need to be aware of as you plan to apply for bankruptcy a second time include:

  • It will not let you discharge some debts like some tax bills, spousal support, and child support. You will still be required to pay off those debts no matter how many times you file for bankruptcy.
  • You will still have to wait for at least four years to file a Chapter 13 bankruptcy following a Chapter 7 to receive total relief of your debts.
  • You must demonstrate to the bankruptcy court that your actions are in good faith when filing for Chapter 13 bankruptcy following a successful Chapter 7. You can only proceed to file a bankruptcy petition again after obtaining court approval
  • Filing for bankruptcy in Chapter 13 following a Chapter 7 will compromise any efforts you wish to make to organize your finances.

Strategies for a Successful Double Filing

After weighing all options available, you can try some strategies to ensure that your double filing brings you success if you wish to try double filing.

Anyone wishing to apply for bankruptcy for the second or subsequent time needs to develop a solid plan that will make the legal process smooth. Here are some steps that you can consider taking:

  • Think of an alternative way of managing your debts other than filing for bankruptcy again — Remember that filing for bankruptcy has setbacks that could affect you in many ways, including your credit rating. It should be the last resort after all other options have failed to deliver the desired outcome. Thus, think of different debt-relief strategies that could be available for you, like renegotiating the payment terms with your debtors or finding ways to boost your income.
  • Take time to think of the right bankruptcy option to file for the second or subsequent time. If you have no other available debt relief option, consider speaking to a skilled bankruptcy attorney for guidance.
  • Find out the consequences of double filing and determine how it could affect your situation — Ensure that you know what to expect after double filing, and be sure that you will be okay with it. For instance, double filing will keep your credit rating low for a more extended period. Proceed to file a bankruptcy petition a second time if you are okay with that. Additionally, the next bankruptcy Chapter you choose can result in the loss of some of your assets. Ensure that you are okay with that before filing your petition in court
  • Be sure that you understand the waiting periods from one filing to another. Only file a bankruptcy petition when you know that your petition has a high chance of going through. It would be a waste of time and money to apply for bankruptcy for the second time before the waiting period is over.
  • Determine whether you need legal help when filing for bankruptcy for the second time, or you can do it on your own — Remember that you have greater chances of success when you have the correct legal help and guidance. A bankruptcy attorney will smoothen the legal process and help you avoid making mistakes that could jeopardize your case.

Effects of Multiple Bankruptcy Filings on Your Credit Rating

Filing for bankruptcy is an excellent way to manage your debts as an individual or business. The good news is that the law does not limit the number of times you can apply for bankruptcy in your lifetime. But, its effects on your credit rating cannot be ignored. Every bankruptcy filing you make will appear on your credit report and significantly affect your credit rating. It helps to think of this and how it could affect you before you apply for bankruptcy for the second or subsequent time.

A bankruptcy filing will stay on an applicant's credit report for seven to ten years. If you file a bankruptcy petition for the second or subsequent time, the filings will appear in your report for several years. Sometimes, the first and second bankruptcy filing will overlap on your report, which will appear simultaneously. That could bring your credit rating even lower.

Here are possible effects of filing for bankruptcy multiple times you must be aware of for informed decision making:

You Could Lose Automatic Stay

Filing for bankruptcy for the second or subsequent time can result in a loss of automatic stay. In bankruptcy, automatic stay helps you avoid contact with creditors who could try to collect their debts from you while in the bankruptcy process. If you have been receiving endless calls, emails, or messages from creditors in their attempt to recover their debts, that stops the moment a bankruptcy court puts an automatic stay on your creditors. Losing that means that your creditors will continue contacting you even after filing for bankruptcy, which is very frustrating.

Low Credit Rating

It would be best if you had a higher credit rating to obtain credit quickly and with fair terms and conditions. Lenders will be skeptical about lending to anyone with a low credit rating. Banking institutions will reject your applications, and those that agree to lend you will increase the lending rates. Several bankruptcy filings on your credit information could leave you with an extremely low credit rating. It means that it could take a long time before you can obtain credit freely and with favorable rates.

Difficulties Obtaining Credit

You experience difficulties in obtaining credit after filing for bankruptcy. That will continue after the second and subsequent filing. Thus, you could be ineligible for loans like mortgages, car loans, and credit cards.

Other Problems

Filing for bankruptcy several times could also create other issues like difficulties finding a place to rent or lease, obtaining suitable employment, and buying insurance.

Alternative Debt Relief Strategies For You

It helps to consider alternative debt relief strategies before settling for bankruptcy to avoid some or all of the issues discussed above. Filing for bankruptcy should always come as a last resort after exhausting other options. Some of the options you could consider are:

  • Seeking the help of a credit counselor in managing your debts — A credit counselor could help you come up with a solid debt management strategy that could help you get out of debt eventually.
  • Credit consolidation, whereby you consolidate all your debts into a single loan — Fortunately for you, there are financial institutions that offer debt consolidation services that could help you in this journey. The main focus would be to eliminate high-interest debts first so that you are left with debts you can easily manage with your income.
  • Seeking the help of a debt company that offers programs that could help you renegotiate with the people you owe for fairer terms. It could be easier to repay your debts with newer and better terms.

Find a Skilled Bankruptcy Attorney Near Me

Are you still in debt after filing for bankruptcy and are considering filing for bankruptcy again in San Diego?

It helps to know that you can apply for bankruptcy as many times as possible. However, familiarize yourself with the advantages and disadvantages of filing for bankruptcy several times for informed decision-making. We have excellent skills and experience handling all types of bankruptcy cases at San Diego Bankruptcy Attorney. Thus, we could offer legal advice and assistance to help you make the right decision. Call us at 619-488-6168 and let us review your situation.