How Quickly Can You Get Through Bankruptcy?
Posted on: 11 February 2021
The idea of spending a long time going through bankruptcy is something that's hardly appealing to anyone. If you're preparing to file, there's a good chance that you'd like to know how quickly you can get from start to finish. Here are three things a bankruptcy attorney will tell a client about how rapidly they may be able to handle the process.
Regardless of the type of bankruptcy you're planning to pursue, the courts like to see filings move quickly. These usually take no more than a few weeks, and there are rules meant to speed the process up. From the time you'll submit your initial paperwork to when you'll provide all of the supporting documentation, you're likely looking at less than two weeks.
If that sounds scary, it's worth noting that such speediness doesn't kick in until you file. The court expects you to have everything together at the start, and you don't have to start the clock on any of this until you're ready. Just hold off on the initial petition for relief, and there won't be any pressure to move it. The lone exception would be if creditors asked a judge to force you into bankruptcy, but that's a pretty rare scenario.
Type of Bankruptcy
The biggest thing that's likely to determine whether things keep going quickly is the type of bankruptcy you're filing. Generally, the Chapter 7 process of liquidating assets and giving the proceeds to a petitioner's creditors tends to go fast. That's especially the case with personal Chapter 7 bankruptcies, which rarely take more than a few months to complete. Some business Chapter 7 cases may take longer simply due to the debts and number of creditors involved.
Conversely, the Chapter 11 and 13 processes usually take much longer. These involve restructuring plans, and the court won't discharge any debts until payments are completed under the plan. Usually, that means a plan will take between three to five years to finish.
The creditors' rights and interests are central to any bankruptcy. If a group of creditors tries to assert that something is wrong, such as a petitioner hiding assets or fraudulently claiming bankruptcy to get out of playing, the court will look closer. In Chapter 11, the creditors can even submit alternative plans for the court to consider. Such legal maneuvers may add several months to a case to handle things like the discovery of evidence, sworn testimony, and the judge's decision.Share