How Long It Takes To File For Bankruptcy?

BankruptcyWhether you are someone who is just curious on how long it takes to file for bankruptcy or someone who finds the information necessary since you have to file the case, the question itself is somewhat tricky.

For a fact, it is an advantage when you know exactly how long it will take you to file for a bankruptcy case. For one, you can easily map out how you can begin making a fresh start once you are out of debt. Second, you can easily allot the necessary time you need to focus on your bankruptcy case. Third, you can do everything else necessary for you to get out of your mounting debt.

However, no two people have the same debt. You would definitely have a different list of assets and income sources combined. There is also the matter of the bankruptcy chapter under which you will be filing your case on. Therefore, to answer the question rightly, you have to take note of a few considerations.

A General Take on How Long it Takes to File for Bankruptcy

Though bankruptcy cases are all different, there is a general time frame being followed whether you are filing for Chapter 7 or Chapter 13 bankruptcy. On average, filing your case under Chapter 7 might take you four to six months to settle whereas Chapter 13 bankruptcy would take a bit longer from three to five years.

Naturally, filing for a bankruptcy case under Chapter 7 is easier to complete than with Chapter 13 due to the big differences of debt nature being considered on both cases. Under Chapter 7, a discharged debt no longer requires any payment so the debtor can easily move on as soon as the case is done. On the other hand, Chapter 13 requires a debtor to come up with a monthly repayment plan to pay creditors which can take a longer time to settle.

The Varying Factors

Although all bankruptcy cases are subject to the federal bankruptcy code of the states, determining how long your bankruptcy case might take will be dependent on the state where you live and how your situation fits into the bankruptcy scheme. Though you can count on the fast and efficient discharging of your debts under Chapter 7 bankruptcy, there are several varying factors as to why your filing might take too long or just enough time for filing.

How it Works Under Chapter 7 Bankruptcy?

Though Chapter 7 bankruptcy allows all your debts to be easily discharged, it also requires you to give up and see a few of your properties to be able to pay your creditors. A bankruptcy trustee usually performs the liquidation of your assets for a quicker and more efficient selling out.

The filing process under Chapter 7 entails your filing of a bankruptcy petition and debt schedules to the bankruptcy court. These documents contain necessary information on not just your debt but your income, properties and assets, expenses, and other financial aspects that you need to disclose. This includes exempted properties as defined under state law so that the bankruptcy trustees will immediately know which assets can be liquidated and which ones cannot be.

After that, a notice of a scheduled hearing would be sent to you. This usually takes place from 20 to 40 days after the date from when you filed your bankruptcy petition. It is a must that you attend this meeting of creditors so that you can provide other necessary information or supply similar documents from your case’s appointed bankruptcy trustee. After this meeting, the court will provide a discharge order of your debts which might take a few months and a final decree to officially close your bankruptcy case.

How it Works Under Chapter 13 Bankruptcy

Most of the time, debtors do not resort to filing a Chapter 13 bankruptcy unless they are advised to do so. Usually, people who still have a high enough income to work on a repayment plan are compelled by law to file under this chapter.

Just like with Chapter 7 Bankruptcy, the filing process for Chapter 13 is very much the same. The only difference is that besides a preliminary creditors’ meeting, follow-up court appearances are also necessary before a repayment plan can be approved by the final court. Compared to Chapter 7, Chapter 13 takes too long to process since repayment schedules usually range from three to five years to finish. Debtors who file under this bankruptcy chapter have to make their monthly payments to creditors via the bankruptcy trustees to make sure that each payment are made.

Are there any other factors to consider that might make a bankruptcy case take too long?

Actually, yes. Though there is a set period for each bankruptcy cases, the approval of your petition might take a longer time than standard due to some conditions.

For example, failing to provide complete information of your financial assets and liabilities can make your bankruptcy trustee request for additional financial information during a separate meeting and have your official hearing rescheduled. Also, if you are required to take a course on personal financial management and you delay getting the certificate for it, then you’re in higher chances of getting your bankruptcy petition processed later.

There is also the consideration of the last time you file for a bankruptcy case. Having previously filed a case might hold off the new one you are filing for as well since there is a several years’ mark that you have to be aware of before you can file for another bankruptcy case. Creditors may also challenge the dischargeability of your debts or your property exemptions or both which would make your case processing time longer.

What You Need to Do

Take note that even though your debts have been discharged under Chapter 7 bankruptcy or that you have met your obligations as stated under Chapter 13, your bankruptcy case can still remain for as long as 10 years on your credit report.

However, if you don’t want to have your bankruptcy case filing take too long because of little filing mistakes and information you don’t know, hiring an experienced bankruptcy lawyer would be your next best course of action. Not only will they be able to answer all your questions and give you advice, they can also make you bankruptcy filing process quick and easy as possible.

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