How many times can you get bankruptcy discharge?
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Deep in debt and don’t know how to dig out? Wilmington bankruptcy is a fitting solution for many financial fiascos, but you should use it wisely because it’s not a tool you can use often. Most bankruptcy filers who get a discharge never need to file again. But if you do get into another financial scrape, you might want to know how many times you can get a Wilmington bankruptcy discharge.
What’s bankruptcy discharge?
It’s important to note that filing bankruptcy and obtaining bankruptcy discharge are different. When you file bankruptcy, you start the debt relief process. Not every bankruptcy case makes it all the way to discharge. Chapter 7 cases are far more likely to result in the discharge of debt. Chapter 13 takes three to five years, and not everyone makes it all the way through the process. Even so, Chapter 13 can help you out of a financial crisis without achieving discharge.
There is almost no limit on how many times you can file Wilmington bankruptcy. Some people file Chapter 13 but then don’t continue the plan. They might file again a year later and again a year after that. There may be a time ban on repeat bankruptcy filings based on why the court dismissed your case. For instance, if you willfully didn’t comply with court orders to appear or furnish documents, you may have to wait out a time limit before another case filing - but there's no set limit on how many times you can file.
Discharge in Chapter 13 vs. Chapter 7
The bankruptcy discharge is different between Wilmington Chapter 7 and Chapter 13 bankruptcy. With Chapter 7, the time lapse from filing to discharge is usually less than six months, and you can wipe out almost all your unsecured debt including credit cards, medical bills, old utility bills, and any lingering balances from other unsecured debt. With Chapter 13, you must complete your three to five-year repayment plan to score a discharge.
Chapter 13 is preferable for people with delinquent secured debt (auto loan, mortgage, etc.) they need time to get current. These cases often also reduce the percentage you must pay on unsecured debt (medical bills, credit cards, etc.) down to pennies on the dollar depending on your disposable income and debt. It’s a long and arduous process living on a tight budget while on the Chapter 13 repayment plan because the court requires you to devote all spare income to your debt.
So how many times can you get a bankruptcy discharge?
There’s no set number of times you can get Wilmington bankruptcy discharge. If you filed your first bankruptcy at age 18 and lived to be 98, you could potentially get 10 bankruptcy discharges under Chapter 7 in your lifetime. Here’s how. Once you get a Chapter 7 debt discharge, the law says you must wait eight years to get another. So if you had 80 years of bankruptcy filings, spaced by eight years apart, you could get potentially 10 discharges in your adult lifetime.
With Chapter 13, it’s different. You must wait at least two years after your discharge to pursue another discharge. If you blend Chapter 13 and Chapter 7 filings (which is often done to maximize debt relief impact), the answer is more complex. If you get a Chapter 13 discharge then want to file Chapter 7, you must wait six years from the date of filing Chapter 13. If you file Chapter 13 after Chapter 7, you would need to wait four years.
Most bankruptcy filers are one and done
Even though you can pursue multiple bankruptcy discharges, the data on debt relief shows that most people only get one bankruptcy discharge in their lives. Why? A financial crisis that's so catastrophic that you need bankruptcy intervention is usually a rare and life-changing event.
It might be divorce that drives the debt or a long bout of unemployment or a life-threatening illness like cancer that spikes medical expenses. Once the trigger event resolves, it usually doesn’t crop up again. No matter what caused your financial crisis, bankruptcy might be the best way to get past it and move on with your life.
To find out more, read reviews from our clients, then contact the Law Offices of John T. Orcutt for a free Wilmington bankruptcy consultation. Call +1-919-646-2654 then come see us in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.