How Long Does Bankruptcy Take to Discharge

How long does bankruptcy take to discharge? Most Chapter 7 cases take between four and six months to complete. It might take longer if there are things that happen, such as:

  • You will need to provide additional information or copies
  • The bankruptcy trustee must either sell the property
  • You are involved in a bankruptcy-related case

This article will explain how long it takes to complete the Chapter 7 bankruptcy procedure.

What Is Chapter 7 Bankruptcy?

A Chapter 7 bankruptcy lets you eliminate or “discharge” qualified debt without having to pay into a repayment plan. The means test will help you determine if you are eligible.

You will also be able to keep your job and property. You can sell things you don’t have to protect under the exemption statutes of your state, and proceeds will be used to repay your creditors.

How Long Will Chapter 7 Bankruptcy Take?

The majority of Chapter 7 cases can be closed in four months or less. Depending on your particular case, the length of your Chapter 7 case will vary.

Here are some things you can expect.

File Your Paperwork

You file the bankruptcy paperwork to the court. These documents include information about your income, assets, financial transactions, and property that you are allowed to exempt.

Attend the 341 Meeting With Creditors Hearing

Once you file, the court will inform your creditors that any collection activity against you must stop. The court will schedule a time for you to appear in court, the 341 meeting with creditors hearing. 

This is between 20 and 40 business days after your file. The bankruptcy trustee will take you under oath at the hearing and ask you questions. Although creditors have the right of asking questions, this is very rare. It is likely that your time with the Chapter 7 trustee assigned to your case will take less than ten minutes.

Additional Information

The trustee may request additional information or remind you to bring identification documents (such as your driver’s license and social security card) to the 341 meeting. After receiving all information, the trustee will close the hearing. After the hearing ends, creditors have 30 days to object to the discharge of any particular debt or the entire case.

Filling Out the Financial Management Certificate

After you have received notice of your 341 meeting, you can start your financial management class — the second of two required classes for a discharge. It must be completed within 60 days from the date of the 341 meeting.

Receiving Your Discharge

If everything goes according to plan, your bankruptcy discharge (the court order that eliminates your debts) should be received within 60 days of your meeting with creditors. There may also be a few days for mailing. Your case will not be closed officially until the court has resolved all outstanding issues, issued the “final decree” and dismissed your case.

Why It Might Take Longer To Complete Your Chapter 7 Bankruptcy

Although the bankruptcy court typically grants discharges and closes cases in less than five months, things do not always go so smoothly. The problem will determine how long it takes to close the case.

  • A short delay. If your information is not provided when it should be, but you rectify the problem promptly, discharge and closure of your case will likely take place within a few months.
  • A short to medium delay. If there is a property dispute, you will likely get your discharge quickly. But your case remains open until the property issue is resolved. The amount of time the trustee takes to sell the property or how complex the dispute is will determine the length of the delay.
  • A long delay. If you have questions about your discharge rights, you will likely be involved in bankruptcy proceedings. Your discharge and closure could be delayed by the bankruptcy court for six months to one year.

Situations that Might Make a Chapter 7 Case Last Longer

These are some common situations that can cause your Chapter 7 bankruptcy case to stay open longer.

The Trustee Requires More Information

If you are asked by the trustee to add documents to your case, the trustee may delay closing your case until you supply the items requested. The trustee may reschedule 341 meetings of creditors. This will have the effect of pushing back deadlines that must be met before your case can close. The trustee may cancel the continuation hearing date if you have not provided the documents to his satisfaction. You will have to go back to court if you don’t provide the documents before the trustee approves the continued hearing date.

A Creditor Has Questions

The trustee normally allocates ten minutes for each bankruptcy case. They may reschedule the hearing if all creditors have not been addressed within the time limit. In complicated cases or when the creditor suspects you have committed fraud, continued meetings are more common. If the creditor objects, your case may be delayed beyond the conclusion of the meeting.

The Trustee Is Selling Your Property

It is possible that the matter remains open if the trustee has to sell some of your property. However, it won’t affect your discharge. The case will continue to be open until the trustee closes the sale of the property, distributes funds to creditors, and submits a final report. Real estate is more difficult to sell than other assets.

A Complaint or Motion Needs to Be Resolved

While some bankruptcy cases require a bankruptcy judge to resolve the issues, not all litigation will cause delays. A disagreement over whether you can exempt your stamp collection from bankruptcy will not affect your discharge. Imagine your creditor asking the court to decide that you must repay a debt. In such a case, the court will not release you until the matter is resolved. You can expect the lawsuit to add six months to your case.

You Wish to Pay off Student Loans

This is not an automatic process. You would need to file an adversary proceeding, a bankruptcy lawsuit stating that the repayment of the debt would be a hardship. Your student loans would be discharged by you either agreeing with the lender or winning the case at trial. Your case would be open until the matter regarding student loans is resolved. 

Ready to Take Control of Your Finances?

Take control of your finances and regain financial freedom with our bankruptcy services. At Bruner Wright, we understand how financial stress can be overwhelming and impact every aspect of life. That is why we strive to offer comprehensive yet compassionate bankruptcy solutions that help you get back on track.

Our team of knowledgeable bankruptcy attorneys will collaborate with you to craft a tailored plan to address your financial difficulties. We’ll guide you through the bankruptcy process, arming you with all the information and resources necessary for informed decisions about your financial future.

Services We Offer:

Don’t let financial strain dictate your life. Let us help you regain control of your finances and get the fresh start that you deserve. Contact us now to book a consultation and discover how our bankruptcy services can give you a brighter financial future.