Bankruptcy gives you a fresh start financially. But it’s not for everyone.
So when should you file for bankruptcy?
There are many theories posted online about this subject, but keep in mind
few bankruptcies are exactly the same. In some cases, you might be trying
to save the home you spent your life paying for. In other cases, you may
have fallen into debt due to a medical condition. Even simple credit card
overspending, or less than simple job loss, can lead to bankruptcy
Bankruptcy does have advantages, especially when you consider personal
Chapter 7 and
Chapter 13 bankruptcy. Filing for bankruptcy is not about giving up; it’s about reworking
your finances so you can get a second chance.
The question posed in the title–how long does it take to file bankruptcy–is
easier to answer than why you should file.
The process for Chapter 7 bankruptcy typically only lasts 3-4 months. You
hire an attorney, file with the courts, get a trustee who liquidates your
nonexempt assets, and then you are for the most part free of creditor
harassment, demanding letters from the bank, and huge interest rates on
your credit card debt. Still, Chapter 7 bankruptcy should only be used
in certain cases: in some respects, it’s the best form of bankruptcy
available; but in others, you might lose many of your assets such as your
car and home. It depends on what assets will be exempt and nonexempt.
For instance, you cannot cancel mortgage debt, so this won’t save
your home from foreclosure. You can eliminate the majority of your debt,
especially credit card debt.
Before Chapter 7 bankruptcy begins, hire a professional bankruptcy attorney
to look over your case. As you’ll have to follow court guidelines
such as taking debt management classes and showing your income and debt.
Chapter 13 bankruptcy typically lasts 3-5 years. You hire an attorney,
file with the court, create a plan to pay back your debt over this period,
and hopefully at the end you’re back on your feet. If you still
have an income, can pay monthly expenses, and follow court guidelines,
you will be better off financially within a few years. Many debtors who
make enough money are now being told by courts to file for Chapter 13
bankruptcy; this is because Chapter 7 bankruptcy involving canceling credit
card debt is much more common.
So we know how long Chapter 7 and Chapter 13 bankruptcy take. How long
should it take for you to get a fresh start? If you have to file bankruptcy
again, can you? Getting financially solvent is another complicated question,
but with the right plan, with the advantages of bankruptcy, you can. However,
this bankruptcy will remain on your credit report for 10 years, which
can limit your spending.
You can file for Chapter 7 or Chapter 13 bankruptcy again after six years
time has passed. At this point, it may seem like you can never get your
finances in order. However, a good bankruptcy attorney can help you beyond
the court room: he or she can also help you stop creditor harassment.
The advantages of bankruptcy are many, the time it takes most often a few
months or a few years, and the costs small in comparison to what you gain.
If you’re interested in filing for bankruptcy, if you want a fresh
start, contact a good bankruptcy attorney today.