Bankruptcy can often be a relatively swift process, and may provide debt relief within just a few months. The duration of a bankruptcy case, though, depends on which chapter you file.
Chapter 7, the most common type of personal bankruptcy, typically takes a few months, while Chapter 13 generally lasts three to five years. While time is important, there are several other factors that should help guide your bankruptcy decision.
Both types of bankruptcy come with immediate protections that begin when your petition is filed with the courts, and typically last for the duration of the case. So while the length of a bankruptcy may depend on the type filed (and other factors), some benefits of bankruptcy may be available immediately.
Chapter 7 bankruptcy, which is typically used by people in debt who have limited income, usually takes between four and six months. In brief, here's how these few months are spent:
During this process, people who file Chapter 7 may be able to eliminate some or all of their unsecured debts, including credit card bills, medical debt, and personal and payday loans.
Bankruptcy courts take reasonable efforts to ensure that the process goes relatively quickly, as it is in the best interests of the debtor and the court to solve the debt issues in a swift fashion.
In contrast, Chapter 13 bankruptcy is designed to take a bit longer, but this chapter may offer unique, long-lasting debt relief. The typical Chapter 13 case takes between 36 and 60 months, or three to five years.
Chapter 13 is commonly referred to as the "wage-earner's plan" because it provides debt relief for working Americans. Here's how these three to five years are filled:
At the end of this repayment period, many filers find that they have settled their debts, and are able to move forward with a clean financial slate.
In addition, if Chapter 13 filers make regular payments on their plan, their efforts may be rewarded by the discharge of other unsecured debts, though this depends on filers' unique circumstances.
To learn more about how long your bankruptcy may take, connect with a local bankruptcy lawyer today.
For a free consultation with a lawyer in your area to discuss these factors, simply fill out the brief form below.