How Long Does Chapter 7 Bankruptcy Last?

Chapter 7 bankruptcy is a simple type of filing called a liquidation.

What happens in this case is that instead of a reorganization that occurs with Chapter 11 or Chapter 13, the assets (if there are any) that are not exempt under Florida bankruptcy and federal law are sold by the US trustee and used to pay off your creditors. You can file as an individual or as a business, but there is a means test to file for Chapter 7. If you exceed the amount of allowable assets, your bankruptcy can be converted to a Chapter 11 or 13.

Your Chapter 7 is comparatively quick as opposed to the more intricate Chapter 11 or 13, and is generally discharged in three to six months. This depends on a variety of factors including how crowded the dockets are. However, as a caveat only, if you have creditors who object to your filing or the case is more complex, you could be longer in obtaining a discharge.

How long does chapter 7 bankruptcy last for Florida residents?

Please note, you must be a resident of Florida for 90 days before filing for bankruptcy in the state, and you will need to avoid charging your credit cards or taking out any loans 90 days before filing. Any loans or purchases made on credit in that time will not receive the benefit of the automatic stay. You must complete credit counseling before filing, as well. See? Bankruptcy, even “simple” one scan take some planning.

They should also take a lawyer.

During those three to six months, you’re going to have a lot on your plate from Statement of Intention to your Creditors’ Meeting. Your attorney, if your wisely retain one, and the US trustee will handle it. Why your attorney? The judge, the trustee, the clerks of the court, nine of them are not allowed to advise you because they are not lawyers. Your creditors will have attorneys to protect and speak for their interests, and so should you.

After discharge, the situation is not so bleak. I’m asked pretty often how long a Chapter 7 bankruptcy lasts on a credit report; the answer is about ten years. However, the more time has passed since the bankruptcy, the less impact it has on your credit, and thus increases your ability to secure loans, credit cards, rent an apartment or obtain a mortgage. You may be a better candidate for credit since you can’t file for bankruptcy again for eight years. You literally have nowhere to go but up from there.

If you are thinking about filing for bankruptcy, I’d urge you to come in for a free consultation before you make up your mind and go charging in. There are alternatives to bankruptcy and preparations to make before you actually file. Bring your paperwork and we can sit down to talk about where you are now, and where you’d like to be. Bankruptcy is not a crash and burn mending, but it is a new start for many people overwhelmed with debt. I think we can get a good outcome for you.