One of the first questions many people have when considering bankruptcy is “how long does it take to file for bankruptcy?” Planning for the next year or longer makes good financial sense, especially if you are trying to recover from financial stress that has led to bankruptcy. However, planning properly for a bankruptcy’s timeline can be tricky – and often leads to confusion for those undergoing this process.
It is important to remember that bankruptcy – no matter which chapter you file for – is a process. It does not happen overnight and there are minimum requirements for how long that process can take.
So, how long does it take to file for bankruptcy? Generally speaking, the answer ranges from four months to about a year for some types of bankruptcy and three to five years for others. There is no single, hard and fast answer. There are a lot of factors that can impact how quickly your bankruptcy process wraps up.
While not knowing exactly how long your bankruptcy process will take can understandably be frustrating, it is important to know this upfront. This way, you can be prepared for the variety of factors that may influence the length of the process – and know what to do if something delays or stalls it altogether.
When asking “how long does it take to file for bankruptcy?” it is important to note that the bankruptcy chapter makes a difference.
Chapter 7 bankruptcy is typically a much shorter process than Chapter 13. When you are quoted a timeline of four to twelve months for bankruptcy, Chapter 7 is generally what is being referenced.
During a Chapter 7 bankruptcy, all your eligible assets will be liquidated. If there are problems or delays with this process, it can slow things down. However, the average timeframe for a discharge from Chapter 7 bankruptcy is around six months after the initial filing.
What about Chapter 13 bankruptcy? This process is much longer than that of chapter 7, but for good reason. During Chapter 7 bankruptcy, the process is hastened because there is much less for you to do; your assets are liquidated to offset the discharge of your debts, and you move quickly toward that discharge. During Chapter 13, a lot more is required of the person who filed for bankruptcy.
The goal of Chapter 13 bankruptcy is to repay as much of your outstanding debt as possible. While your overall debts may be reduced through negotiation, the point of this chapter of bankruptcy is to create a workable solution for repayment. As such, the length of repayment – and therefore, the bankruptcy itself – can range from three to five years.
This might make it seem like Chapter 7 bankruptcy is the obvious answer for the “better” choice. There are many factors at play when deciding between bankruptcy chapters, though – and you may not qualify for your first choice.
Chapter 7 bankruptcy has a much more serious impact on your credit. The damage it does to your credit report and score will last for ten years. Chapter 13 has a much less serious impact on your credit, since you will have proof of having paid off your debts. Each paid item will remain on your credit report for seven years after you repay it in full, with a notation regarding the repayment date.
As previously mentioned, several factors can slow things down when you are filing for bankruptcy. This is why there is no hard and fast answer for how long bankruptcy can take – and why being informed about the differences in bankruptcy chapters is so important.
When you are filing for Chapter 7 bankruptcy, having many assets that must be liquidated can be an issue. Complications or delays with these liquidations can cause the process to drag, which can result in a timeline closer to a year from filing to discharge.
Chapter 13 bankruptcy is already a much longer process than Chapter 7, and there are issues that can slow it down even more.
Sometimes, life takes a turn for the worse during your Chapter 13 process. Perhaps you established your repayment plan at a time when you and your spouse were both employed full-time, but then suffered the loss of a job or reduction of hours. Maybe someone in your family suffered a serious medical issue and you are now faced with major medical expenses. Regardless of the specific circumstances, changes in your situation can dramatically impact the Chapter 13 process.
This was an all-too-common scene during the first two years after the Covid-19 pandemic. The pandemic and the resulting economic fallout left many people without gainful employment and unable to continue their chapter 13 repayment plans. Uncertain financial futures also left many unsure of how to proceed with reestablishing their repayment agreements. This resulted in thousands of people waiting additional months or even years to have their bankruptcy behind them.
With all these issues, it is no wonder so many Florida families have found themselves stuck during the bankruptcy process over the last few years. The fact is, planning the timeline for bankruptcy down to the day is hard and depends on a variety of factors. Bankruptcy itself can be stressful and difficult to understand – but it doesn’t have to be.
At the Van Horn Law Group, we understand that life happens. We realize that good people end up in bad financial situations every day. That is why we have dedicated our professional lives to helping South Florida families just like yours get back on track through better bankruptcy practices.
Deciding which bankruptcy chapter is best for you can be confusing. Our experienced team has the knowledge to help you navigate the entire process, from finding the right chapter for your unique financial situation to moving toward discharge faster.
Don’t languish in the long process of bankruptcy. Let our team guide your steps throughout the process, from filing to discharge. Give us a call today to learn more about how we help families like yours get back on their financial feet – and see what we can do for you!
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