The bankruptcy process is surrounded by many misconceptions, in part because it is also surrounded by stigma.
If you’re struggling with debt that feels inescapable, bankruptcy might just be the way to financial freedom. However, while bankruptcy is supposed to give filers a fresh start, things don’t always work that way. Because of this, some people may need to file for bankruptcy more than once.
To help our clients learn more about bankruptcy in Texas, the Brownsville business bankruptcy attorney of Phillippe and Associates has put together a guide to how many times and how often a person or a business can file bankruptcy.
If you think filing for bankruptcy for the first, or second time might be right for you, we can help.
How Many Times Can Someone File Bankruptcy?
Under Texas law, there is no limit for the number of times a person can file for bankruptcy.
However, there are limits on how many times a court will discharge your debts. This may not sound like it makes sense, but not all bankruptcy filings serve the purpose of having debt discharged.
Sometimes filers are looking for the court to place an automatic stay on their debt repayments to help them catch up on payments. In order to determine whether or not to discharge your debt, the court will closely examine your financial situation and reason for filing.
How Long Does a Person Need to Wait Before Filing Again?
One of the first questions many people will consider when filing bankruptcy is, “How many times can I file?”
But the more helpful question may be, “How often can a person file for bankruptcy in Texas?” The answer is that it depends. Below you can learn about the different waiting periods between filings for the three most common forms of bankruptcy.
If you’re planning on filing for Chapter 7 bankruptcy but have already done so in the past, you must wait eight years from the previous filing before you can file again. However, if you want to file Chapter 7 and previously filed Chapter 13, you only have to wait six years between filings.
Under the Bankruptcy Code, less common types of bankruptcy like Chapter 11 have no time limits between filings. This means a business in Texas can file for Chapter 11 bankruptcy as many times and as often as they need.
It’s worth noting, however, that this doesn’t mean that each filing will be successful.
If you plan on filing for Chapter 13 bankruptcy after having done so already in the past, you will need to wait two years from the date of the original filing before you can file again. If the first type of bankruptcy you filed was Chapter 7 and now you’re seeking Chapter 13 protection, you will need to wait four years between filings.
Phillippe & Associates Are Your Brownsville Bankruptcy Attorneys
There’s no denying that bankruptcy is a powerful financial tool, but that doesn’t mean the process always works perfectly. Plus, it’s possible for a person to simply be unlucky enough to accumulate unmanageable debt more than once. Because of this, debtors in Texas can file for bankruptcy multiple times.
Bankruptcy is a complex process and this complexity makes it important that you seek legal counsel if you are planning to file — especially if you’re filing for the second time.