How Long Does a Bankruptcy Case Take to Complete?

Thousands of people in this state declare personal bankruptcy each year. If you have filed for bankruptcy or are planning to do so, you may be curious as to how long it will take to complete your bankruptcy case. Many variables have an impact on determining your timeline, and these include the type of protection sought and the type of property that you have.

Chapter 7 Bankruptcy Takes About Six Months to Complete

A Chapter 7 bankruptcy involves liquidating nonexempt assets and using the money to pay creditors. In such a scenario, you will start by filling out bankruptcy documents and paying a filing fee. The documents will list your income, expenses and assets as of the time that you file. You will also need to meet with your trustee as well as attend a meeting of creditors.

In many cases, creditors will not object to your filing, which means that the case can be discharged rather quickly. A discharge letter can be issued 60 days after the creditor meeting if there are no objections. However, if creditors do object, it could result in bankruptcy litigation. This could take several additional months to resolve. The same is true if you have nonexempt assets that need to be found and liquidated.

Chapter 13 Bankruptcy Generally Takes Up to Five Years to Finish

In a Chapter 13 case, you will reorganize your debt and make payments over the course of three to five years. The length of your repayment period depends on your income and other criteria set by the state. As in a Chapter 7 case, you would start by filing bankruptcy documents listing your income and assets, and the filing fee would need to be paid. You would then propose a repayment plan that creditors have a chance to approve or object to.

It is important to note that you will generally start making payments as soon as you file for Chapter 13 protection. If your proposed repayment plan is ultimately rejected, you can work with creditors to come up with a new plan that is more to their liking. Once the repayment plan is complete, you will be issued a discharge letter by the court. This is generally done within 60 days of making your final plan payment.

Outside Parties Could Be Involved in Your Case

You may think that giving away property or selling it for less than it is worth could make it easier to qualify for your preferred type of bankruptcy. However, this tactic may only serve to indefinitely lengthen the amount of time that it takes to have your debts discharged. This type of dodge can actually constitute fraud. In some cases, it could result in a bankruptcy case being reopened or the ability to seek bankruptcy being revoked entirely.

It is important to know that the trustee in the case can take legal action against third parties. For instance, if you were to sell business assets to a friend for one dollar, the trustee could take action against that friend to recover the property. You should know that you have an obligation to cooperate with the trustee for as long as the case is open. This is also true if the case is reopened after receiving a discharge.

Don’t Forget About Your Credit Counseling Requirement

Prior to filing for bankruptcy, you will need to take a credit counseling course. This can be done in person, over the phone or online. Your bankruptcy attorney will be able to help you find an approved course. This must be done within 180 days of filing.

If you need help with organizing your paperwork or you have questions about your bankruptcy case, contact the bankruptcy attorneys at Neuner & Ventura LLP. You can call our office in Marlton, New Jersey, at (856) 596-2828 or fill out the form on our website to schedule a consultation.