How long does a bankruptcy case take?

How long does a bankruptcy case take?

Federal law provides two types of bankruptcy for consumers: a liquidation, also known as “straight bankruptcy,” under Chapter 7, and a payment plan bankruptcy under Chapter 13.

Simple, uncontested Chapter 7 bankruptcy proceedings typically take 4-6 months from the filing date to the date a discharge is obtained. Your Chapter 7 bankruptcy might take longer to conclude if you have failed to include all necessary information and documents in your original filing, or if the bankruptcy trustee is required to sell off assets to pay creditors, or if there are contested matters in your case.

A Chapter 13 bankruptcy, on the other hand, will last anywhere from three to five years. This is because the purpose of a Chapter 13 bankruptcy proceeding is to re-organize and prioritize a debtor’s financial obligations and then repay all, or a portion, of them over time. Debtors whose income is above Georgia’s median income must propose a five-year repayment plan. All other Chapter 13 bankruptcy plans must be for at least three years.

Regardless of which type of bankruptcy you pursue, filing a complaint with the bankruptcy court creates an “automatic stay” of most judicial, administrative or other proceedings against the debtor or property of the debtor’s estate. The automatic stay also prohibits creditors from contacting the debtor about outstanding debts or taking any action to repossess vehicles or other property in which they claim a security interest.

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