How long your bankruptcy will take depends on which Chapter you filed and if there are any issues with your case. The Chapter you filed could be a Chapter 7 (liquidation), a Chapter 13 (reorganization), or a Chapter 11 (high-debt/business organization). Issues in your case could include not completing your paperwork correctly, not providing all necessary paperwork to your Trustee, or problems with your exemptions.
Most of the work and time of a person filing for bankruptcy is spent gathering the information in order to complete the paperwork. You need to collect bank statements, paystubs, tax returns, statements regarding your debt, and much more. Some people are very organized and motivated to complete the paperwork can do so over a weekend. Some people need weeks or months to get everything together. How much time the gathering phase takes is up to each individual who is filing.
Most bankruptcy attorneys take two to five business days in order to convert the information you provide into the bankruptcy petition, schedules, and statements the court will need. You will also then meet with your attorney to review these documents. Your schedule and the attorney’s schedule will also affect how soon you can meet.
A typical Chapter 7 case usually lasts three to five months from the date of the filing of the bankruptcy petition until the date the Court enters Discharge Order removing your liability on the dischargeable debts. After a Chapter 7 case is filed, the Court provides the person filing (called a “Debtor”) with a Notice of Chapter 7 Bankruptcy Case. The Notice provides certain deadlines that must pass before the Court enters a Discharge Order. The deadline is also for the Trustee to review your case and see if there are any issues. Any issues must be raised prior to the deadlines. If there are no issues raised, you should receive your Discharge the very next day.
A typical Chapter 13 case usually lasts three to five years from the date of the filing of the bankruptcy petition until you complete all of your required payments under the Chapter 13 reorganization plan and the Court enters Discharge Order. Whether your case is three years, five years, or somewhere in between, depends on the level of income you have in relation to the national median income at the time of your filing. In a Chapter 13, a Debtor, along with their attorney, propose a Chapter 13 reorganization plan. The Trustee will review the plan and usually changes must be made. Once the Trustee and Debtor agree on the plan, the Court will confirm the plan. The Confirmation Order allows everyone to understand what the payments will be for the remainder of the case. Once you complete all of your required payments and notify the court of any child support or alimony payments you must make, the Court will enter a Discharge Order.
A typical Chapter 11 case usually lasts twelve to twenty-four months from the date of the filing of the bankruptcy petition until the date the Court confirms the Disclosure Statement and Chapter 11 reorganization plan and closes the case. A Chapter 11 case has multiple avenues of reorganization and the Court usually allows Debtors-in-possession to handle the reorganization outside of court, rather than under the Court’s review (as in a Chapter 13).
If issues arise in your case, the case could extend anywhere from four to twelve months additional in a Chapter 7 case to handle these issues. In a Chapter 13 or a Chapter 11, issues will prohibit the Court from entering a Confirmation Order. A Confirmation Order would then affect the Debtor and the continuing of the case. Some examples include:
- If you did not complete your petition, schedules, or statements correctly, they may need to be amended and refiled with the Court. This most likely would require another meeting with your attorney, time for your attorney to amend the documents, time for your attorney to file the documents with the court, and fees for the attorney to handle these items.
- If you did not provide all necessary paperwork to the Trustee, this could lead to issues in your case. If you intentionally failed to provide paperwork, you could be seen by the Trustee as not being honest. The Trustee might then request a 2004 Examination and require you to bring paperwork with you for a separate interview. This is a very stressful situation for most Debtors. This most likely would require another meeting with your attorney, time for your attorney to collect and review the documents, time for your attorney to provide the documents to the Trustee, and fees for the attorney to handle these items.
- If you did not exempt your assets correctly, the Trustee may seek to sell your items and would not need your permission. The Trustee require money from you in exchange for not selling your items. This can oftentimes cause Debtor’s stress because it is difficult to understand exemptions and you are legally allowed to keep under the Bankruptcy laws.
Meeting with an experienced bankruptcy attorney can ease your fears and ensure your paperwork is done correctly. There is no substitution for the advice an experienced bankruptcy attorney can provide. Most Debtors find a great value in the fees they pay for an attorney to handle their paperwork correctly, counsel them about the process, and have an attorney attend the Trustee hearing with them.