The timelines for bankruptcy can be assessed in two main ways, namely; how long the entire process takes as well as how long bankruptcy stays in a person's credit history.
How Long Does the Chapter 7 Bankruptcy Process Last?
Generally, it can take 4-6 months to conclude a Chaper-7 bankruptcy case. However, these are just typical timelines. Some cases will take longer. The main factors dictating how long a chapter-7 bankruptcy case will take include; the need for more time for bankruptcy trustees to sell property. A case will also take longer if there is a lawsuit or if the bankruptcy court or trustee requests more information.
Mistakes in the application process can also increase the time it takes to conclude a case. For instance, if you accidentally omit a creditor in your list of debts, you may be allowed to correct the mistake. More time will be needed to redo some processes i.e., calculate new income figures, affordability, etc.
To ensure your bankruptcy process takes the least time possible, follow every chapter-7 bankruptcy application requirement to the letter. You should also familiarize yourself with differences in state laws. For instance, chapter-7 bankruptcy exemptions in Austin TX aren't identical to those in other states. You need a seasoned Austin bankruptcy attorney to get the process right from the onset.
You can use the FREE initial consultation offered by experienced bankruptcy lawyers to get important information on expediting your process.
How Long Does Each Chapter 7 Bankruptcy Process Take?
It's already clear that the process takes 4-6 months in most cases. If you want a breakdown of the exact time each process will take, here's what you should know.
Filing Chapter-7 Bankruptcy Paperwork
Filing for bankruptcy starts with submitting the necessary paperwork. The time it takes to gather documents like tax returns, income, expenses, assets, debts, recent financials, etc., will depend on a person. The process takes a few hours to a few days.
Attending Creditor Meetings
Once all paperwork is filed, you need to attend creditor meetings. Bankruptcy courts notify creditors of your application and the fact that they should stop collection activities. Courts set a specific date when debtors and creditors should meet. It is usually 20 to 40 days after filing. Typical hearings take a few minutes. The process includes taking oaths and answering routine questions from creditors.
Providing Additional Documentation
The documentation/information provided when filling may not be enough. What's more, trustees appointed by bankruptcy courts may want additional information. You may also forget to provide basic documentation i.e., identification, during a creditors' hearing. Hearings can't be concluded if some information is missing. You also have a month after the creditor hearing to object to a discharge of a certain debt or the entire case.
Attending a Credit Management Course
You have two months to complete a mandatory financial management course. This course is taken after a creditor's meeting. The time it takes to conclude chapter-7 bankruptcy will obviously depend on how fast you finish the mandatory credit management course.
Getting a Discharge
If you do everything perfectly to this point, you can expect to get a bankruptcy discharge in about 60 days (from the time you meet creditors). However, a chapter-7 bankruptcy case won't be closed officially until the court resolves outstanding matters.
Depending on how fast you act, you can shorten the time taken to conclude your Chapter-7 case by simple actions like filing in your paperwork right away and correctly to attending a credit management course immediately, and ensuring you provide all the required information. A bankruptcy attorney can give you other "tricks" to fasten the process.
Considering someone can object to a chapter-7 discharge and a hearing can be rescheduled, you need legal advice to anticipate and handle possible delays.
How Bad Can a Delay Get?
Chapter -7 bankruptcy cases can delay for a short time, moderately or over an extended period. A short delay can be solved quickly. Typical examples include the need to provide additional information. Such delays take a few weeks to a month in typical cases.
Bankruptcy cases that extend moderately involve assets with property issues. A typical example would be a property dispute making disposal harder. Some property also takes trustees longer to liquidate.
A long delay is anything that surpasses the typical 6 months. A lawsuit is a typical example of an occurrence that would delay a Chapter-7 bankruptcy case beyond 6 months.
How Long Does a Chapter-7 Remain in a Credit Report?
While bankruptcy will ease a person's debt burden, there are obvious negative consequences, the most common being a negative credit record. Bankruptcy is recorded and stays in a person's credit history for a while affecting access to credit and access to certain employment opportunities.
It's therefore understandable why someone would want to know how long a bankruptcy record stays in their credit history. You have to wait for 7 years for a bankruptcy record to be removed from your credit report. The timeline begins when you are reported delinquent before filing for bankruptcy. If no debt was reported before filing, you need to wait seven years from when you filed.
Chapter 7 bankruptcy has an impact on your score for a decade. However, the impact lessens over time. If you want to get credit or a job that may require good credit history, you should think hard about filing for bankruptcy. Talk to a bankruptcy attorney before making a final decision.
Nevertheless, credit scores are repairable. You can take deliberate actions to begin repairing your score and increasing your odds of securing debt or work opportunities in the future. For instance, applying for a credit card and using it prudently can boost a score damaged by bankruptcy.
Summary: How Long Does a Chapter 7 Last?
Chapter-7 bankruptcy cases in Austin TX, and all other states in the US are usually concluded in 4 to 6 months. However, the timelines vary due to factors like how fast you fill and submit bankruptcy paperwork to the speed at which you attend creditor meetings and offer additional documentation. If your case is typical, expect to be done in 4 to 6 months. Otherwise, consult a lawyer to get an accurate timeline and ways of expediting the process.