How Long Does The Bankruptcy Process Last?

The duration of the bankruptcy process can vary significantly depending on the type of bankruptcy filed. Here’s a breakdown of how long the process typically lasts for the most common types of personal bankruptcy in the United States: Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, often referred to as liquidation bankruptcy, is generally the quickest form of bankruptcy. Here’s a general timeline:

1. Filing the Petition: The bankruptcy process officially begins when you file your bankruptcy petition with the court. This action immediately invokes the automatic stay, which halts most collection actions against you.
2. 341 Meeting of Creditors: Approximately 21 to 40 days after filing, the bankruptcy trustee will hold the 341 meeting of creditors, where creditors can ask questions about your bankruptcy forms and financial situation. You are required to attend this meeting.
3. Discharge: After the meeting of creditors, you’ll need to wait for the discharge, which is the official order that eliminates your eligible debts. In a Chapter 7 case, the discharge typically occurs about 60 to 90 days post-meeting. Therefore, the entire Chapter 7 process usually takes about 4 to 6 months from filing to discharge.
4. Closing the Case: The case is not officially closed when the discharge is issued. The trustee might need additional time to administer assets if it’s an asset case. However, for most no-asset Chapter 7 cases, the court will close the case shortly after the discharge.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, known as a wage earner’s plan, is considerably longer due to the repayment plan involved:

1. Filing the Petition: As with Chapter 7, the process begins when you file your petition. The automatic stay also goes into effect immediately.
2. 341 Meeting of Creditors: This meeting occurs similarly to Chapter 7, usually within 21 to 40 days after filing.
3. Confirmation Hearing: A few weeks to a few months after the 341 meeting, there will be a confirmation hearing where the court approves your repayment plan, assuming everything is in order.
4. Repayment Plan Duration: The duration of the repayment plan is typically 3 to 5 years, depending on your income and the specifics of your plan.
5. Discharge: Once you’ve completed your repayment plan, any remaining eligible debts are discharged. This means that a Chapter 13 bankruptcy can last anywhere from 3 to 5 years.

Other Considerations

• Pre-Bankruptcy Counseling: Before you can file for bankruptcy, you must complete a credit counseling course, which can affect your timeline depending on how quickly you complete it.
• Financial Management Course: Before your debts are discharged, you’ll need to complete a debtor education course in both Chapter 7 and Chapter 13 cases.
• Legal or Administrative Delays: Occasionally, there might be delays due to legal challenges, administrative issues, or complications in your case.

Understanding the timeline can help set realistic expectations for the bankruptcy process. However, individual circumstances can vary, so it’s beneficial to consult with a bankruptcy attorney to understand how the process will likely unfold in your specific situation.

Bankruptcy Process