How long does bankruptcy take?
In today’s tough economy, more and more people are finding themselves in need of taking out loans, using credit cards, and, in some unfortunate cases, eventually filing for bankruptcy to help with relieving debts and owed money. When you are thinking of filing for bankruptcy, you have multiple options based on your current lifestyle, financial situation, and your future plans when it comes to your finances. Filing bankruptcy is not an easy choice for many, and can cause stress on families or business owners who are trying to keep homes afloat along with companies and additional owned assets. Once the process of filing bankruptcy is complete, you will be able to get the stress relief you need financially to help you regain control of your financial future. The process of filing for bankruptcy is different depending on whether you are filing Chapter 7 or Chapter 13 bankruptcy (among four additional chapters of bankruptcy, although these are the most common). If you want to know more on how long does bankruptcy take, you can research the different aspects of bankruptcy before you seek help or begin filing with the court.
Bankruptcy is the dissolving of debts for those who are unable to pay due to a lack of income, foreclosure, or even a medical injury or illness that has recently been diagnosed. There are no limitations on why you may be filing bankruptcy, especially if you have a large amount of debt that is ruining your credit and you have absolutely no way of paying it back. Filing bankruptcy is also useful for those with large amounts of medical bills or for those who are seeking a way to start fresh and rebuild credit for their future. Many times, if you live in the United States, bankruptcy laws vary from each state and depend on where you currently live. When you want to know how long does bankruptcy take, it also depends on the chapter you file for.
Chapter 7 Bankruptcy
When you find yourself in debt but you have a limited income and you are unable to pay your debt, filing Chapter 7 bankruptcy is often the ideal solution as it allows you to, in many cases, rid most of the debt you may have incurred over time. When you file Chapter 7 bankruptcy, you must first organize all of the debt you owe and all of the assets you have in your name along with the names of the creditors you owe as well. Then, once you file, there is a meeting with a bankruptcy trustee to work through the various owed debts. The entire process of discharging these debts through the court system takes anywhere from four to six months unless there are issues that arise or missing documents or claims when filing, so make sure to have all of your records, including bank statements, financial statements from businesses, and tax return information.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is known as the “wage-earner’s plan”, and takes nearly three to five years to file (but also gives filers a chance for long-lasting and long-term debt relief). Filing with detailed documents including all of the debts you have is required just as with Chapter 7 bankruptcy (a lawyer who specializes in bankruptcy can often help with properly filing and filling out the documents needed). You are then also required to meet with a bankruptcy trustee again to help with making a debt payment plan, depending on your income. You can then schedule to pay the debt off between three and five years.
When you are researching how long does bankruptcy take, it is important to first evaluate your own financial debt and all of the debt you owe in total, including medical bills, credit card bills, and even unpaid services in the past that have damaged or ruined your credit. The more information you gather, the better understanding you will have when it comes time to choose the type of bankruptcy you need to file to protect you and your family, and the quicker the process will be.