Bankruptcy Discharge Rules

• Whether your additional bankruptcy is eligible for discharge depends largely on what chapter you file and how long it has been since your previous filing. As of 2011, the bankruptcy code stipulates that if you have had a previous Chapter 7 or 11, eight years must pass from the filing between the previous case and the filing of a new Chapter 7. If you want to file a new Chapter 7 with a previous Chapter 12 or 13, the time between filings is six years. The exceptions are if you paid 70 percent or more of the allowed unsecured debts in good faith in the previous bankruptcy, or if you paid the previous bankruptcy's allowed unsecured debts in full. Four years may elapse between filings in a previous Chapter 13 and a new 7, 11 or 12. Between two Chapter 13 cases, two years must pass.
  
  

Rationale

• The bankruptcy code regulates repeat filings in order to prevent abuse of the system. By limiting the number of discharges a person can get, the number of bankruptcies filed theoretically goes down and only those who truly need to file will do so. The second idea behind discharge regulations is that the lack of immediate discharge encourages borrowers to fulfill the financial obligations they have to creditors and rectify spending problems they might have.
  
  

Credit Considerations

• Even though you can file bankruptcy multiple times and get additional discharges if you must, your credit takes a hit every time you file. It is for this reason that most financial advisers recommend bankruptcy only as a last resort. The regulations on denial of discharge thus also protect you as a consumer, giving you enough time to rebuild your credit history and score.
  
  

Bottom Line

• You can get a denial of discharge in a subsequent bankruptcy filing provided enough time has elapsed between filings. However, the court will be on the lookout for fraudulent, repeat filers and thus may review subsequent cases more closely. That can extend the time it takes for you to get your discharge. If enough time hasn't elapsed between filings for you to get a clear discharge, it is highly likely that you need to examine your finances seriously to discover why a second bankruptcy is necessary so soon after a previous filing.