How Long Does a Bankruptcy Case Take?

The length of a bankruptcy case varies by the chapter filed.

A typical chapter 7 bankruptcy case will about three to five months to complete, from start to finish. A chapter 13 case will not be completed until you make the final payment on the repayment plan.

Chapter 7: Timeline of the Process

In a chapter 7 bankruptcy, often called a "straight" bankruptcy, you are petitioning the court to cancel all of your debt. In return, the bankruptcy trustee (a lawyer hired by the court to administer bankruptcy cases) will look to see if you have any property or assets available for liquidation.

After you provide the court with all of the necessary forms and paperwork, you will be assigned a hearing date, generally within two months of your filing the petition. During this period of time, you will be protected from any creditor collection attempts by the automatic stay. This means creditors cannot repossess property, foreclose on your home, or even send you letters demanding payment.

Once your hearing date comes up, you must attend what is known as the 341 "meeting of creditors". Happily, creditors rarely show up to these meetings, unless they have a lot of money at stake and a good reason for asking the courts to keep the debt out of the discharge. If this does happen, then you will have to attend another hearing, often referred to as an adversarial hearing, where a judge will hear the creditors case and decide on the outcome.

Typically though, the 341 meeting will only take a matter of minutes. At this meeting, the trustee will ask you a series of procedural questions as well as ensure that the information you have provided is accurate.

Shortly after you attend your meeting, you will receive notice in the mail of your discharge. This generally happens about a month after the meeting, and at this point your case is complete.

Chapter 13 Bankruptcy Process

A chapter 13 case, often called a "wage earners" bankruptcy, is a more complicated than a chapter 7 case. In a chapter 13 bankruptcy, the court attempts to reorganize your debts into a repayment plan that fits your net disposable income.

Similar to a chapter 7, you will need to meet with the trustee, and at this meeting you must include your proposed repayment plan. The details of the plan can be a little complex, but generally it must account for 100% of your secured debt to be repaid as well as certain priority unsecured debts, like student loans and past due tax debt.

About another month or two after the 341 hearing, you will need to go to a "confirmation" hearing where the court will confirm that your plan meets the criteria of chapter 13 bankruptcy laws.

If everything goes smoothly, you will finish your bankruptcy case upon completion of either a three or five year repayment plan. The length of the plan is determined by your income. If you earn greater than the median income for your state, then the plan will be five years, less than the median and it’s three years.

It is important that anyone thinking about bankruptcy talk to an attorney first. Getting professional legal advice helps avoid any mistakes, and ensures the case, if necessary, goes as smoothly and quickly as possible.