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What is the Duration of a Bankruptcy?

If you are filing for bankruptcy, you can expect to wait anywhere between a few months to five years before your debt is discharged. The exact time depends on which chapter you are filing under. Chapter 7 resolves bankruptcy in four to six months, while Chapter 13 takes three to five years. Here is a rough breakdown of debt clearance timelines for both the chapters:

Chapter 13 Bankruptcy Duration

This chapter discharges your debt in three to five years. The applicant has to pay restructured monthly payments to creditors to clear his/her debt.

  • 180 Days before Filing: Complete a credit counseling session or debtor cannot file
  • 90 Days before Filing: Must be a resident of the state where you are filing in during this time
  • Day of Filing: Stay Order sent by Court to all your creditors which notifies them of the filing. A court appointed federal employee will review your eligibility and then schedule a meeting with your creditors.
  • 15 Days after Filing: You will have to present any required documents for your repayment plan during this time.
  • 30 Days after Filing: Your first restructured payment is due. The court keeps reviewing your regularity in filing payments after this first payment is made.
  • 36 to 60 months after Filing: Your debt is cleared and you can start fresh. You will receive a Final Discharge Notice, but you must take a financial management course before you can get it.

Chapter 7 Bankruptcy Timeline

Meant for individuals with lower incomes and assets, this discharges debt in four to six months.

  • 180 Days before Filing: Complete a credit counseling session or debtor cannot file
  • 90 Days before Filing: Must be a resident of the state where you are filing in during this time
  • Day of Filing: Stay Order sent by Court to all your creditors which notifies them of the filing. A court appointed federal employee will review your eligibility and then schedule a meeting with your creditors.
  • 30 Days after Filing: Debtor files a Statement of Intention telling the court whether you want to keep your collateral or surrender it to the creditors.
  • 45 Days after Filing: You have to act on your Statement of Intention, keeping or surrendering the property.
  • 3 to 6 Weeks after Filing: Court calls a meeting of your creditors. You must present the most recent copy of your tax return before this.
  • 4 to 6 Months after Filing: If all creditors provide proofs of payment (including government agencies like IRS), your debt is discharged.

Choosing the best bankruptcy option for you depends not just on their durations, but also on their pre-requisites. While Chapter 7 will provide relief in up to 6 weeks, you will have to prove that you are not eligible to file under Chapter 13.If you are in the Columbus, Ohio area, the law office of Semons & Semons can assist you in deciding what is right for you.

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