How Long for a Bankruptcy to Be Discharged
Bankruptcy is a legal process that provides relief to individuals or businesses who are unable to repay their debts. It offers a fresh start by eliminating or restructuring debts under the supervision of a bankruptcy court. However, one question that frequently arises when considering bankruptcy is how long it takes for the bankruptcy to be discharged.
The time it takes for a bankruptcy to be discharged varies depending on the type of bankruptcy filed and the circumstances surrounding the case. Generally, there are two common types of bankruptcy for individuals: Chapter 7 and Chapter 13.
Chapter 7 bankruptcy, also known as liquidation bankruptcy, is the most common type filed by individuals. It involves selling non-exempt assets to repay creditors and discharge most debts. In most cases, a Chapter 7 bankruptcy can be discharged within three to six months after filing.
On the other hand, Chapter 13 bankruptcy, also known as reorganization bankruptcy, allows individuals to keep their assets and repay their debts over a period of three to five years. The discharge in a Chapter 13 bankruptcy occurs once the repayment plan is completed. This means that the discharge may take longer than in Chapter 7, depending on the length of the repayment plan.
Besides the type of bankruptcy, there are other factors that can affect the time it takes for a bankruptcy to be discharged. These factors include the complexity of the case, the cooperation of creditors, and any objections raised by creditors or the bankruptcy trustee.
It is important to note that the discharge of a bankruptcy does not necessarily mean that all debts will be eliminated. Some debts, such as student loans, child support, alimony, and certain tax debts, are not dischargeable in bankruptcy. These debts will still need to be repaid even after the bankruptcy is discharged.
Frequently Asked Questions (FAQs):
Q: Can I file for bankruptcy if I have already filed in the past?
A: Yes, you can file for bankruptcy multiple times, but there are limitations on how soon you can file again. If you previously filed for Chapter 7 bankruptcy, you must wait eight years before filing for Chapter 7 again. If you previously filed for Chapter 13 bankruptcy, you must wait six years before filing for Chapter 7, or four years before filing for Chapter 13 again.
Q: Will bankruptcy stop foreclosure or repossession?
A: Filing for bankruptcy will temporarily stop foreclosure or repossession proceedings through an automatic stay. However, it is important to note that bankruptcy will not permanently prevent foreclosure or repossession if you are unable to catch up on missed payments or renegotiate the terms of your loan.
Q: Will bankruptcy affect my credit score?
A: Yes, filing for bankruptcy will have a negative impact on your credit score. However, if you are considering bankruptcy, your credit score is likely already affected by your financial situation. Bankruptcy can provide an opportunity to rebuild your credit over time by eliminating or restructuring your debts.
Q: Can I keep my house and car if I file for bankruptcy?
A: The ability to keep your house and car will depend on various factors, including the type of bankruptcy filed, the equity you have in your assets, and your ability to continue making payments. In Chapter 7 bankruptcy, non-exempt assets may be sold to repay creditors, which could include your house or car if you have significant equity. In Chapter 13 bankruptcy, you can usually keep your assets as long as you continue making payments according to the repayment plan.
In conclusion, the time it takes for a bankruptcy to be discharged depends on the type of bankruptcy filed, the complexity of the case, and other factors. Chapter 7 bankruptcy can typically be discharged within three to six months, while Chapter 13 bankruptcy may take three to five years to complete the repayment plan and receive a discharge. It is important to consult with a bankruptcy attorney to understand the specific timelines and requirements in your situation.