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How long does a consumer bankruptcy case take?

On Behalf of | Jun 19, 2023 | Chapter 7 Bankruptcy

The duration of a consumer bankruptcy case can vary depending on several factors, including the type of bankruptcy, the complexity of the case and the efficiency of the legal process. 

If you are thinking about filing for bankruptcy, it is important to understand how long the process is likely to take so that you can adjust your expectations and plans accordingly. 

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most common form of consumer bankruptcy. The process generally takes around three to six months to complete. Here is a breakdown of the key steps and their approximate durations:

  • Pre-Filing Requirements: Before filing for Chapter 7 bankruptcy, individuals are usually required to undergo credit counseling, which typically takes a few hours to complete.
  • Filing the Bankruptcy Petition: Once the necessary documentation is gathered, the bankruptcy petition is filed with the court. This step can usually be completed within a few days.
  • Meeting of Creditors: Approximately 20 to 40 days after filing, a meeting of creditors, also known as a 341 meeting, is scheduled. This meeting allows the bankruptcy trustee and creditors to ask questions regarding the debtor’s financial situation. The meeting is typically brief and lasts around 10 to 30 minutes.
  • Discharge: If no objections or complications arise, the discharge of eligible debts is typically granted 60 to 90 days after the meeting of creditors. 

If you do not qualify for Chapter 7 bankruptcy relief or you need to save your home from foreclosure, you may benefit from taking advantage of the longer Chapter 13 bankruptcy process. 

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also known as a reorganization bankruptcy, involves creating a repayment plan to settle debts over a 3-to-5-year period. The timeline for Chapter 13 bankruptcy is longer than that of Chapter 7 due to the extended repayment period. The process typically unfolds as follows:

  • Filing and Plan Confirmation: Similar to Chapter 7, the initial filing of the bankruptcy petition and the development of the repayment plan can be completed within a few days. However, plan confirmation can take several months, as it involves negotiation with creditors and court approval.
  • Repayment Period: Once the repayment plan is approved, the debtor must adhere to the agreed-upon payment schedule for the designated period, typically lasting 3 to 5 years.
  • Discharge: Upon successful completion of the repayment plan, remaining eligible debts are discharged. 

It’s important to note that the timelines mentioned here are rough estimates and can vary depending on the specifics of each case. Seeking legal guidance can provide individuals with a more accurate understanding of the expected timeline for their specific circumstances.