How Long Does It Take to Process a Bankruptcy?

Making the decision to file for bankruptcy is certainly difficult. Once you’ve decided to file, you must determine which chapter of bankruptcy is most appropriate for your situation. Each chapter of bankruptcy has a different time range for completion.

In general, Chapter 7 bankruptcies are processed the most quickly as they are a form of liquidation. Chapter 12 bankruptcy and Chapter 13 bankruptcy often take longer as they involve repayment plans.

Although you’re likely eager to have your case over and done with, you will have to wait for debts to be officially discharged. In this blog post, we’ll look at some of the most common forms of bankruptcy and their average completion times.

Chapter 7

A Chapter 7 bankruptcy allows you to discharge the majority of your unsecured debts. These debts may include personal loans, medical bills, and credit card debt. It’s important to understand that you will likely have some debt remaining, such as taxes, education loans, and child support payments will need to be paid. You may lose assets and have to relinquish property. These assets are used to pay off your creditors. Be sure to discuss any exemptions that may apply to your case with an experienced bankruptcy attorney.

Chapter 7 bankruptcy cases last from four to six months on average. This time ranges from filing to receiving discharges to remove your debt. As with any legal matter, the exact amount of time it will take to process your case and discharge debt cannot be predicted. Events such as a lawsuit or the selling of your assets for creditors may lengthen your case. You may also receive requests for more information, which will make the case take a bit longer.

Chapter 11

Chapter 11 bankruptcies are generally more complex than Chapter 7 bankruptcies. They often require that you work with financial counsel as a corporate debtor. Unfortunately, these cases can last for years, especially if you have a large corporation with great sums of debts and assets. Expediting the introductory motions can help you accelerate the process and shorten the completion period.

Chapter 12

Chapter 12 bankruptcies are less common as they are designed to provide financial relief for family farmers and fisherman with regular annual income. This form of bankruptcy must pay all or some of their debts with a repayment plan.

These installments are typically made to creditors over a period of three to five years. This plan will include all disposable income.

Chapter 13

A Chapter 13 bankruptcy is essentially a form of reorganization. You’ll have repayment plans to consider. Due to the increased complexity of the case, Chapter 13 bankruptcies can take anywhere from 36 to 60 months to be finalized. Federal law prohibits the completion of Chapter 13 bankruptcy plans to last more than 60 months.

Although no one wants to file for bankruptcy, it can be the best decision for your financial future. The chapter of bankruptcy you choose to file will greatly affect completion time. Make sure you file for the most appropriate chapter by meeting with an experienced bankruptcy attorney. At Tyler, Bartl & Ramsdell, P.L.C., we’ve helped countless individuals successfully navigate the bankruptcy process. To discuss your case and how to proceed, contact us today!