How Long Does Bankruptcy Take

How Long Does Bankruptcy Take

Most people dread to hear the word bankruptcy, and for good reason. To even consider the notion of filing for either Chapter 7 or Chapter 11 bankruptcy protection is to admit that one's personal finances have become unmanageable. At least, that is how the popular prejudice goes. In reality, while bankruptcy leaves a big black mark on the credit report of the debtor, it is sometimes the only way to get out of debt. How long does bankruptcy take? That depends on the type of bankruptcy filed, and what the particular circumstances of the debtor are.

How Long Does Bankruptcy Take For Chapter 7 Cases?

Chapter 7 bankruptcy protection is the down-and-dirty method of filing for bankruptcy. Under chapter 7, all non-exempt property and assets and seized and liquidated in order to repay creditors. All exempt property is retained by the debtor. If there are any remaining debts left after all non-exempt property and assets have been liquidate, those debts are discharged, which means the debtor is relieved of the obligation to repay them.

Chapter 7 usually takes around two to three months to completely finish, depending on the individual circumstances of the debtor. It begins with the debtor filing a petition requiring that their debts be discharged under Chapter 7 of Title 11 of the United States Code. The actual court hearing usually takes less than ten minutes. After the hearing, the debtor will receive a notice in the mail from the court notifying them of the discharge.

How Long Does Bankruptcy Take For Chapter 13 Cases?

Until 2005, it was fairly easy to file for Chapter 7 bankruptcy protection. Then the United States Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act, which made it harder to file for Chapter 7 and converted most Chapter 7 cases to Chapter 13 cases. Under Chapter 13, the debts are not discharged but instead the debtor files a repayment plan with the bankruptcy court for their district. Under this plan, the debtor agrees to repay the debt over a period of time.

Chapter 13, like Chapter 7, begins with the debtor filing a petition with the bankruptcy court. About fifteen to thirty days after this petition is filed, the debtor will receive a notice informing them of the date of their hearing. The hearing usually takes about a half-hour or so. After the hearing, the debtor will receive a notice that the repayment plan has been authorized within another fifteen or thirty days.

For more information about bankruptcy, visit www.uscourts.gov.

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