Bankruptcy is considered a last resort for those whose financial situation no longer permits them to meet their payment obligations. The main purpose of declaring bankruptcy is to absolve one’s debt and offer legal protection from any legal action taken by creditors.

The process of declaring either a chapter 7 or chapter 12 bankruptcy is quite straightforward and, on average, takes four to five months to complete. This is the average, and certain factors may prolong the process. To understand how long the process takes, it is important to understand the basics of the process. Here we will go over the basics steps as well as reasons why certain cases may take longer than the four to five-month average.

Analyze Debt And Ensure Eligibility: Before undertaking the bankruptcy process one must take stock of all debts they wish to include in their bankruptcy filings. This includes both secured and unsecured debts. For one’s debts to be considered for discharge the individual must earn less than the median state income and submit to a means test, which involves a state employee examining all outstanding debts of an individual as well as their assets.

This can take a week or a few months depending on how complicated an individual’s case is. Many people employ bankruptcy experts, such as Sun Coast Law, to help them sort out all their debts, assets, and other concerns.

Fill Out Forms And Complete Debt Management Course: Everyone who declares a chapter 7 or 13 bankruptcy is required to take a one day course in debt management. The individual has 6 months to complete the course from the day they file their bankruptcy papers. The course is now offered online.

Filling out forms can be complicated if the individual has many secured debts. This process usually takes about one week.

Settle Secured Debts: This is likely to be the most time-consuming process for those who have many secured debts to their name. Although bankruptcy can discharge one’s debt obligations, it does not remove a creditor’s right to take possession of whatever collateral was used to secure a loan. The creditor is allowed to sell whatever asset it may be in an effort to regain all, or part, of the outstanding balance on the loan. 

Sometimes certain arrangements can be made with the debtors that result in the individual not being required to forfeit their assets. The most common case of this would be one’s primary residence. This process can take weeks or months and depends largely upon the nature of one’s debts and what assets have been used to secure them.

Complete Second Debt Course And Await Court Filings: The second course, just like the first one can be completed over an afternoon. How quick one has their debts discharged depends, in part, on how soon they finish the course. 

On average, the court typically grants discharge of debts 60 days after the meeting of creditors.

Conclusion: On average, most people can expect their bankruptcy process to take 4 to 5 months. This changes depending on how diligent one is in completing courses and making appropriate filings as well as how long the meeting of creditors takes.

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