The duration of a bankruptcy case depends on the type of bankruptcy you file for.
For a Chapter 7 bankruptcy, the process typically takes between 3 to 6 months from the date of filing to the discharge of debts. After the discharge, the case is generally closed, although some administrative tasks may still need to be completed such as the Trustee’s sale of your non-exempt assets to you or a third party, or the Trustee’s pursuit and collection of avoidable transfers you may have made, to provide a dividend to your creditors.
For a Chapter 13 bankruptcy, the process usually takes between 3 to 5 years, as you’ll be required to propose, confirm, and consummate a plan of reorganization that has a plan term of between 3 to 5 years. Under certain limited circumstances, you can pay off your plan early, before the end of the 3- or 5-year term. Once you’ve successfully completed your repayment plan and the Trustee has distributed your payments to your creditors, the remaining balances of your dischargeable, unsecured debts are discharged, and the case is closed.
Steps to Filing Bankruptcy
The bankruptcy process can vary depending on the type of bankruptcy you file for, but generally, it involves the following steps:
- Credit counseling: Before filing for bankruptcy, you must take an online credit counseling course. My office will provide you the web address to visit and complete the course, which takes about 45 minutes.
- Filing for bankruptcy: You’ll provide my office a great many documents to enable us to prepare your bankruptcy petition and supporting schedules and statements (and a plan if you are filing a Chapter 13). In addition, we will interview you during this preparation process to be sure you know all the questions that are being asked of you, and more importantly, to be sure you will know all the answers you are giving to these questions. Once you are satisfied you have answered all the questions accurately, we will file all these documents for you with the bankruptcy court in your area. These documents will tell the court what chapter bankruptcy you are filing and will include complete information about your income, expenses, assets, and debts. They will also provide other background information about you and your finances, including information about any previous bankruptcy cases you’ve filed.
- Automatic stay: Once you file for bankruptcy, an automatic stay goes into effect. This prohibits creditors from taking any further action to collect debts from you, such as making phone calls or sending collection letters.
- Meeting of creditors: A meeting of creditors, also known as a 341 meeting, will occur about one month after the date you filed bankruptcy. These Meetings are presided over by the Trustee assigned to your case and are conducted by telephone. You and I will call in at the appointed date and time and you will answer questions from the Trustee and any creditors who choose to attend. My office will provide you a list of the commonly asked questions in advance of the Meeting, so you will be prepared for these basic questions. As always, you will tell the truth, the whole truth, and nothing but the truth. By this point in the process, we will have explained the likely outcome of your case to you many times, so you will not feel “lost in the process.”
- Bankruptcy trustee: The court will appoint a bankruptcy trustee to oversee your case. The trustee will review your bankruptcy petition, verify your assets and liabilities, and oversee the liquidation or repayment process.
- Discharge: If you file for Chapter 7 bankruptcy, your eligible debts will be discharged approximately 60 to 90 days after the Meeting of Creditors. If you file for Chapter 13 bankruptcy, you’ll need to complete a repayment plan before receiving a discharge.
It’s important to note that the bankruptcy process can be complex and time-consuming. It’s recommended that you work with a Miami bankruptcy attorney to navigate the process and ensure that your rights are protected.