Yes. If you filed for bankruptcy protection sometime in the past, in California you can file for bankruptcy again. However, there are time restrictions between filings which are different depending on what type of bankruptcy you filed before and what type of bankruptcy you need to file now. Thus, in theory, there is no limit to how many times a person can file for bankruptcy protection as long as the various time restrictions are satisfied. For example, as noted below, you must wait at least eight years between the filing of one Chapter 7 bankruptcy and the filing of a second Chapter 7 bankruptcy. The time restrictions are imposed by Congress as a means of combating abuse of the bankruptcy system. For a long time, the time restriction between Chapter 7 bankruptcy filings was six years. But Congress increased the time restriction to eight years about 15 years ago. Note that the time restrictions are measured from filing date to filing date. Here is a quick summary of the time restrictions:
- From a Chapter 7 bankruptcy to a Chapter 7 — must wait eight years
- From a Chapter 13 bankruptcy to a Chapter 13 — must wait two years
- From a Chapter 7 bankruptcy to a Chapter 13 — must wait four years
- From a Chapter 13 bankruptcy to a Chapter 7 — must wait six years
There are no required waiting periods for the other two types of bankruptcies which involve business and farm bankruptcies.
The reason that the longest time restriction is between Chapter 7 filings is because Chapter 7 is used to fully discharge qualified debt. That is, the debtor is legally relieved of any obligation to pay the discharged debts. As one might imagine, this is the type of bankruptcy that is most likely to be abused. Some might happily “max-out” their credit cards and file for Chapter 7 every couple of years. By contrast, Chapter 13 requires that some portion of the debt be repaid with a payment plan that runs either three or five years. Consequently, there is much less incentive to abuse Chapter 13 bankruptcy filings.
The other reason that the longest time restriction is between Chapter 7 filings is because Chapter 7 bankruptcies are the quickest cases to be completed. As noted, Chapter 13 cases require debtors to establish repayment plans with either three- or five-year terms. The practical effect of this is that debtors are under the “control” of the bankruptcy court for multiple years. As such, there is much less danger of abuse since the court has the ability to quickly punish debtors that abuse the bankruptcy system. Further, banks and creditors are wary of creditors that have a pending bankruptcy case and, thus, Chapter 13 debtors are less likely to obtain excessive amounts of credit.
It is important to reemphasize that the deadlines run between filing dates. As a practical matter, this means that a Chapter 7 can be filed within one year of the completion of a Chapter 13 case which had a five year payment plan.
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For more information or if you think it may be time to file for bankruptcy, contact the Bankruptcy Law Center today. We have the experienced bankruptcy attorneys you need to help evaluate your options. Use our Contact Page or call us at 800-551-7922 to schedule a consultation.