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Can You File For Bankruptcy A Second, Third, Or Fourth Time In Illinois?

Article written by Attorney Kevin O'Flaherty
Updated on
July 17, 2020

In this article, we discuss how often you can file for bankruptcy in Illinois and answer the following questions:

  • How Long Must You Wait Between Filing The Same Chapter Bankruptcy?
  • How Long Must You Wait Between Filing Different Bankruptcies?
  • Can You Get In Trouble For Filing Bankruptcy Too Often?
  • What Can You Do If Your Bankruptcy Is Dismissed?

Economic uncertainty continues to loom in the wake of the growing coronavirus pandemic and with it the very real possibility of bankruptcy for many Americans. But what if you filed for bankruptcy in the 2008-09 recession? Or 10, 5, or even 1 year ago? The bankruptcy system allows for multiple filings within a given period of time, but there are strict guidelines. Filing too close together or deliberately trying to game the system can result in your case being dismissed without a chance to file again, fines, or jail time if fraud is involved.

How Long Must You Wait Between Filing the Same Chapter Bankruptcy?

The time period one must wait between filing for bankruptcy differs depending on whether it is the same chapter or a different one. For filing the same bankruptcy chapter a second, third, etc time in a row the rules are as follows:

  • Chapter 7 to Chapter 7 Bankruptcy: In order to be eligible for another Chapter 7 discharge 8 years must have passed since the last discharge date.
  • Chapter 13 to Chapter 13 Bankruptcy: At a minimum, two years must have elapsed after the last Chapter 13 discharge date in order to file for another Chapter 13 bankruptcy. Most Chapter 13 repayment plans are completed within 3 to 5 years, so if needed you can file another Chapter 13 bankruptcy once your repayment plan is over.

How Long Must You Wait Between Filing Different Bankruptcies?

  • Chapter 13 to Chapter 7: Those looking to file Chapter 7 bankruptcy after Chapter 13 must wait at least 6 years from the filing date unless in the previous Chapter 13 bankruptcy you paid back all of your unsecured debts or a minimum of 70% of your unsecured debts through the repayment plan.
  • Chapter 7 to Chapter 13: Normally, you must wait four years between filing Chapter 7 and Chapter 13 bankruptcy, however, through Chapter 20 bankruptcy you can gain some of the benefits of both types of bankruptcy but there are also drawbacks. Click here for more information on Chapter 20 bankruptcy.

This does not mean it is impossible to file bankruptcy in a shorter window than the allotted time periods, each case is unique and you may be surprised that the bankruptcy court decides to proceed with your case. By the same token, don’t be surprised if the bankruptcy court also dismisses your case whether it's too soon or within the appropriate time frame. And if you try to file again after a dismissal you may be looking at extra penalties.

Can You Get In Trouble For Filing Bankruptcy Too Often?

As long as you’re not willfully committing bankruptcy fraud or filing for bankruptcy in bad faith you shouldn’t have to worry about any criminal or legal troubles. However, with each attempt to file bankruptcy or refiling, especially if you are trying to cut the regulated time periods short, you may be penalized. The most important penalty to be aware of, outside of doing something that is illegal, is a nullified automatic stay.

If the court dismisses your bankruptcy case for whatever reason and you attempt to file another bankruptcy in less than one year the automatic stay will only last 30 days. In subsequent filings, you may not be eligible for the automatic stay at all. In this case, your only option is to file a motion with the court asking for the automatic stay to be extended.

What Can You Do If Your Bankruptcy Is Dismissed?

If the court finds that you’ve been deliberately skirting the system, such as multiple filings in order to delay creditors, the bankruptcy court will likely block you from filing another bankruptcy for a specified period of time, cut your automatic stay short, or seek legal action in more serious cases. If the court dismisses your case in this way it is referred to as a dismissal “with prejudice.”

You don’t have a lot of options if you’ve been locked out of the bankruptcy system. If your case was dismissed without prejudice you can refile for bankruptcy, or appeal your original bankruptcy dismissal. If your Chapter 7 bankruptcy was dismissed on the grounds that you don’t qualify you can still file for Chapter 13 bankruptcy. The most important first step when considering bankruptcy is seeking the guidance of an experienced bankruptcy attorney. Give us a call at 630-324-6666 and we’ll be happy to answer all your questions.

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Can You File For Bankruptcy A Second, Third, Or Fourth Time In Illinois?

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