Bankruptcy is a legal proceeding that allows you to eliminate the burden of your debts and organize your financial life. For some people, the fresh financial start offered by bankruptcy is the only relief they need to move on, and filing another bankruptcy will not be necessary. However, for some individuals, a surprise medical bill, loss of employment, and other financial setbacks could pull them back into debt, requiring a subsequent bankruptcy.

While you can file for bankruptcy as many times as you need the relief, California law stipulates how often you can declare bankruptcy. The amount of time you need to wait before seeking bankruptcy relief will vary depending on the bankruptcy you want to file and the type you filed previously. If your bankruptcy were discharged, the nature and reasons for discharge would play a significant role in your ability to file again. 

The issues around filing multiple bankruptcies can be complicated, and the guidance of a skilled attorney will go a long way for you. Your attorney can guide you on your eligibility for multiple bankruptcies and take you through the filing process.  

How Many Times Can You File for Bankruptcy in California?

California law does not limit the number of times you can file for bankruptcy. If you have received a bankruptcy discharge before and after a while, you run into debt. You could file again. However, whether or not you can file for bankruptcy for a second or third time may depend on time limits and whether or not you meet the eligibility criteria.

Some factors affect your ability to file for another bankruptcy and receive a discharge, and they include:

  1. The type of bankruptcy you filed previously. There are two main types of bankruptcy through which you can receive financial relief from your debts. Each bankruptcy has a criterion that you must meet for you to qualify. Therefore, the success of a current bankruptcy petition may depend on your previous one.
  2. The type of bankruptcy you are seeking to file. As you consider another bankruptcy after a previous discharge, you must receive the guidance of a bankruptcy attorney. The type you choose may be accepted or rejected depending on your qualification.
  3. The amount of time that has elapsed since your bankruptcy discharge. Often, the discharge order is the final stage of a bankruptcy proceeding. When the court issues this order, your debts will be eliminated, or you will make repayment plans to cover your debt. The amount of time you need to wait after filing for each type of bankruptcy starts counting as soon as the court issues this discharge order.
  4. The nature of your previous bankruptcy. There are three ways through which your bankruptcy can be finalized in California. If all goes well and the court accepts your petition, you will receive a discharge. The court will grant your request to eliminate your debt for chapter 7 bankruptcy. If you filed under Chapter 13, your creditors are required to make a reasonable repayment plan with you. Another way bankruptcy can end is through a dismissal with or without prejudice. A dismissal with prejudice means that you did not qualify for the discharge, while a dismissal with prejudice means that you tried to exploit the bankruptcy process. How your previous bankruptcy ends will affect your ability to seek the discharge again.

Bankruptcy Time Limits

The following are the time limits you have to adhere to when filing for a subsequent bankruptcy discharge in California:

  1. Filing Chapter 7 after Chapter 7. If you have received a liquidation bankruptcy, you must wait up to eight years from the day you filed to file again under Chapter 7. This ensures that you file for bankruptcy once every eight years and at most three times in your life.
  2. Filing Chapter 13 after Chapter 13. After filing bankruptcy under chapter 13 and receiving a relief, you should wait up to two years before filing again under this chapter. In most cases, your chapter 13 bankruptcy will take three to five years to be finalized. Therefore, you can file again and receive a discharge when your case is closed. Even when you are not eligible for liquidation bankruptcy, you can still go ahead to file for chapter 13 bankruptcy.
  3. Filing under Chapter 13 after Chapter 7. When you have previously filed Chapter 7 in the past, and you seek to restructure your debts in chapter 13, you must wait up to four years for the court to accept your petition. Most people use this arrangement to discharge the debts they cannot pay and then create a repayment plan to cover the rest.
  4. Filing Chapter 7 after Chapter 13. Chapter 13 bankruptcy aims to restructure your debts and develop favorable payment plans to cover this debt. When you file under this chapter, you must continue to pay your creditors. Sometimes, these plans fail to work, and you find yourself in a worse financial position where chapter 7 bankruptcy will be the only option. If you want to file for liquidation bankruptcy after a chapter 13 discharge, you must wait six years. However, the six years will not apply when you have paid more than 70% of your unsecured debts following the plan you made in chapter 13 bankruptcy.
  5. Dismissal of bankruptcy without prejudice. If you did not receive bankruptcy relief and your case was dismissed, you may need to wait a while to file again. If your bankruptcy is dismissed with prejudice, you cannot file again within 180 days.

How Does Dismissal of a Bankruptcy with Prejudice Affect the Number of Times You Can file?

When you file for bankruptcy, you must meet the required criteria. Any attempts to lie in the petition or take shortcuts will not be taken lightly. You can only file for liquidation bankruptcy if you pass the means test. On the other hand, you must have sufficient income to make monthly payments as indicated in your repayment before filing for Chapter 13 bankruptcy.

A bankruptcy dismissal with prejudice could prevent you from filing for bankruptcy for a while or prohibit you from seeking relief for any debts indicated in the dismissed case. For example, you cannot be able to file for bankruptcy within ten days if your previous petition was discharged for:

  • Failing to follow the court orders. In California, a violation of a court order is a grave offense. Therefore, during your filing and submission of the relevant documents, you failed to follow a court order, and the bankruptcy court could dismiss your case with prejudice.
  • You voluntarily request a dismissal following a motion for relief from the automatic stay. When you file for bankruptcy in California, you will enjoy the benefit of the automatic stay. This means that your creditors cannot come after you to pay the debts before the bankruptcy is resolved. If you ask for the bankruptcy to be dismissed because a creditor filed a motion to lift the automatic stay, your case will be dismissed with prejudice. This is because the court will assume that your main aim of filing for bankruptcy was to avoid or stop foreclosure.
  • Filing multiple bankruptcies to delay creditors. While bankruptcy aims to provide relief for our debts, you need to have valid reasons for taking this legal step. If the court realizes that you have filed multiple bankruptcy petitions intending to delay creditors, the judge will dismiss your case with prejudice.
  • Committing bankruptcy fraud. The judges in bankruptcy court have the discretion of dismissing your case with prejudice. If you file for bankruptcy with an intent to hide some assets, delay creditors, or avoid paying your debts., your case will be dismissed, and you will not be allowed to file again within the next 180 days.

When the court discharges your bankruptcy with prejudice and orders that you wait 180 days, you can file again after this time limit has elapsed. However, if a judge orders an extended time for debts that you could have discharged, you can appeal the court’s decision to dismiss your bankruptcy. 

It is vital to understand that appealing a bankruptcy decision can be costly. Having your bankruptcy be dismissed with prejudice is a serious thing that you should not take lightly. Therefore, you will need to seek the insight of a bankruptcy attorney.

Dismissal of Bankruptcy Without Prejudice

A dismissal without prejudice is a legal term that has significant implications on your ability to file for bankruptcy multiple times. When your case is dismissed without prejudice, the court allows you to file again at any time. The court dismisses your case without prejudice if you fail to:

  • Abide by the deadlines for filing
  • File and provide the correct forms and documents
  • Produce a course completion of debt management or credit counseling
  • Attend a mandatory hearing

The above issues do not indicate any intention to abuse the bankruptcy process. Therefore, you can file multiple times until you meet all the requirements to receive a discharge.

One of the most significant benefits of filing for bankruptcy is the automatic stay. This order prevents your creditors from pursuing you to collect the debts or even seeking legal action against you. You wish to file again when your bankruptcy is dismissed without prejudice. You can seek an extension for the automatic stay. However, the court lifts the automatic stay for individuals whose bankruptcy dismissal is done with prejudice. Within the 180 days of waiting, your creditors can find ways to recover what you owe them.

Filing for Chapter 13 Bankruptcy After a Chapter 7 Discharge

No one wants to go bankrupt. However, this legal proceeding gives you a fresh financial start while blocking your creditors and their attempts to recover from you. Falling into debt again after discharging your obligations in liquidation bankruptcy is not something you anticipate. However, some of the situations that led to bankruptcy are inevitable. While you must wait up to eight years to file for chapter 7 bankruptcy after a similar discharge, you are not out of options.

Four years after your liquidation bankruptcy, you can file again under Chapter 13. Chapter 7 bankruptcy will allow you to eliminate all your unsecured debts. When you use this approach, your bankruptcy trustee will liquidate all your non-exempt property and use the proceeds to pay your debts. On the other hand, the purpose of a Chapter 13 bankruptcy is not to wipe out your debts but to find ways through which you can comfortably pay your debts.

If your debts are not discharged in chapter 7 bankruptcy, you can file under Chapter 13 before the end of four years. However, when you can discharge some of your unsecured debts, you need to wait the entire time. Following up a chapter 7 with a chapter 13 is an option for individuals who want to discharge some of their debts, and for the ones that cannot be discharged, find a way to pay them comfortably.

This approach could be a reasonable way to resolve your debts under the following circumstances:

  • Student debt. Even when you file for liquidation bankruptcy, some debts like child support, alimony, and student loans will not be discharged. Following up the liquidation with chapter 13 gives you time to repay student loan payments to avoid wage garnishment.
  • Back taxes. If, after discharging your debts, you have some back taxes that were not dischargeable, Chapter 13 allows you to pay them off.
  • Lien stripping. Lien stripping helps to eliminate lines like second mortgages. However, the court does not always accept lien stripping, and you will need to consult a competent attorney.
  • Catch up on your mortgage. If you file to discharge your debts under chapter 7, you may not be able to have the option of avoiding foreclosure of your home. Therefore, following up with chapter 13 will be helpful if you wish to keep your home. With a repayment plan, you can catch up on the missed mortgage payment and thus keep your home.

Challenges of Multiple Bankruptcies

Filing for bankruptcy gives you a fresh financial start. This allows you to eliminate liability to some of your debts or create a plan to cover them without pressure and threats from creditors. While you enjoy a fresh start, you can fall back into debt. Financial setbacks like the loss of a job, sickness, or business failure could put you in a situation where bankruptcy is your only option.

Sometimes, you may be filing for bankruptcy again because your first attempt was discharged for an error on paperwork or failure to meet the requirements. Either way, filing subsequent bankruptcies is more challenging than the first time. The bankruptcy process is not easy. You will not only need to pay filing fees, but you will also have to pay for legal representation. Additionally, during subsequent bankruptcies, the benefit of the automatic stay will be shortened or cease to exist. 

Another reason why filing for bankruptcy more than once could be problematic is that your creditors will have an opportunity to object to the debt discharge. Although a creditor may be reluctant to give you more credit after a previous debt is discharged in bankruptcy, building your credit score places you in a better position to receive credit. The act could be suspicious if you attempt to discharge debt from the same creditor multiple times.

If a creditor’s objection to a discharge is accepted in bankruptcy court, you must pay them everything you owe. The bankruptcy court recommends exploring other options for reorganizing your finances before applying for bankruptcy. Every time you file for bankruptcy, the court appoints a trustee to be in charge of the bankruptcy. If your bankruptcy trustee feels that you are abusing the bankruptcy system, they could recommend that you do not receive the discharge.

Find a Skilled Los Angeles Bankruptcy Attorney Near Me

Bankruptcy is a financial tool that helps people and businesses reorganize their financial life when their debts become overwhelming. While there are other ways through which you can pay your debts, bankruptcy may be the only way to lay down your burden and relieve that overwhelming financial stress. You can file for liquidation bankruptcy to eliminate all your unsecured debts or a chapter 13, which allows you to create a repayment plan for your debts.

There is no limit to the number of times you can file for bankruptcy in California. However, if you have ever filed for bankruptcy in the past, you must understand when you will be eligible to file again. Because of each type of bankruptcy type, there are time limits applicable for individuals seeking to file bankruptcy after a previous relief. 

If you feel that you need the fresh financial start offered by bankruptcy and have filed in the past, it would be wise to enlist the guidance of a skilled attorney. At Los Angeles Bankruptcy Attorney, we offer competent legal guidance for all our clients going through bankruptcy in Los Angeles, CA. Call us today at 424-285-5525.