How long does it take to discharge a bankruptcy?

Introduction

Discharging a bankruptcy is a crucial step towards regaining financial stability. However, many individuals facing bankruptcy wonder how long the process will take. The duration of a bankruptcy discharge can vary depending on several factors, including the type of bankruptcy filed, the complexity of the case, and the efficiency of the debtor in fulfilling their obligations. In this article, we will explore the different types of bankruptcy and delve into the timelines associated with each.

Chapter 7 Bankruptcy Discharge

Chapter 7 bankruptcy, also known as liquidation bankruptcy, is the most common type of bankruptcy filed by individuals. The goal of Chapter 7 is to discharge most, if not all, of the debtor’s unsecured debts. The timeline for a Chapter 7 bankruptcy discharge typically ranges from three to six months.

Filing and Automatic Stay: The process begins with the debtor filing a petition for Chapter 7 bankruptcy. Once the petition is filed, an automatic stay is initiated, which halts all collection actions by creditors.

Meeting of Creditors: Within 20 to 40 days after filing, the debtor is required to attend a meeting of creditors, also known as a 341 meeting. During this meeting, the debtor will be questioned by the bankruptcy trustee and any creditors present. The purpose of this meeting is to ensure the accuracy of the information provided in the bankruptcy petition.

Objection Period: After the meeting of creditors, there is a period of time, typically 60 days, during which creditors can object to the discharge of certain debts. If no objections are raised, the bankruptcy court will issue a discharge order.

Chapter 13 Bankruptcy Discharge

Chapter 13 bankruptcy, also known as reorganization bankruptcy, is a repayment plan that allows debtors to retain their assets while repaying a portion of their debts over a three to five-year period. The timeline for a Chapter 13 bankruptcy discharge is longer compared to Chapter 7 due to the repayment plan involved.

Filing and Automatic Stay: Similar to Chapter 7, the debtor initiates the process by filing a petition for Chapter 13 bankruptcy, which triggers an automatic stay.

Confirmation Hearing: Within 20 to 50 days after filing, a confirmation hearing is held to review and approve the proposed repayment plan. The plan must be feasible and meet certain requirements to gain approval.

Repayment Period: Once the repayment plan is confirmed, the debtor begins making regular payments to the bankruptcy trustee, who then distributes the funds to creditors according to the plan. The repayment period typically lasts between three to five years.

Completion of Repayment Plan: After successfully completing the repayment plan, the debtor will receive a discharge order from the bankruptcy court, eliminating any remaining eligible debts.

Conclusion

The duration of a bankruptcy discharge depends on the type of bankruptcy filed. Chapter 7 bankruptcies generally take three to six months, while Chapter 13 bankruptcies can last between three to five years. It is important to note that these timelines are approximate and can vary based on individual circumstances and the efficiency of the bankruptcy process.

If you are considering filing for bankruptcy, it is advisable to consult with a bankruptcy attorney who can guide you through the process and provide personalized advice based on your specific situation.

References

– United States Courts: www.uscourts.gov
– Internal Revenue Service: www.irs.gov
– Legal Information Institute: www.law.cornell.edu