The length of time a bankruptcy case takes varies based on whether you file for Chapter 7 or Chapter 13. Each option has specific processes, which impact the timeline.
What’s the time frame for a Chapter 7 bankruptcy?
Chapter 7 bankruptcy, often called a “fresh start bankruptcy,” discharges most unsecured debts like credit card bills and medical expenses. Such a discharge absolves debtors of repayment obligations. The court may liquidate or sell off non-exempt assets to partially satisfy creditors’ claims. Usually, no assets are sold.
Most Chapter 7 cases take about four to six months from start to finish. The process includes filing the case, attending a creditors’ meeting (usually no one appears), and completing financial counseling courses. Discharging debts rather than focusing on repayment makes Chapter 7 a quicker option.
How long will a Chapter 13 take?
Chapter 13 bankruptcy offers a financial reset. It allows people to keep their property while they pay back their debts over a few years (usually three to five).
The length of the repayment plan depends on the individual’s income and amount of debt. Each month, debtors make payments to a trustee who then distributes the funds to creditors. The repayment plan will determine to total length of the process.
Choosing the right path
Navigating bankruptcy requires careful consideration of financial health and long-term goals. Each option offers a unique approach to debt management, making it crucial to select the one that aligns best with individual circumstances. Ultimately, the aim is to regain financial stability and control, paving the way for a confident and secure future.