As one prepares for the reality of bankruptcy, it’s likely that they will be accompanied by a whole host of emotions: worry, nervousness, hope, and relief, among others.
Another feeling they’ll likely face, of course, is that of confusion. After all, bankruptcy is not always relayed to filers in clear and concise terms, meaning they’ll be left with their own personal checklist of questions to ask as they proceed through the process.
That’s why we’re here today to answer one of the most commonly asked questions: “How long will I be in bankruptcy?”
The answer is largely dependent upon which type of bankruptcy a person files for, as each one features their own discharge period as well as credit report removal timeline.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the process by which the filer’s assets are liquidated, providing them long-term relief from collection harassment and a clean financial slate relatively immediately. Additionally, discharge from their prior debts comes somewhat quickly.
“The debtor normally receives a discharge just a few months after the petition is filed,” according to the Administrative Office of the U.S. Courts.
On average, it often takes approximately four and a half months for a consumer to be discharged from their debts after they’ve filed for Chapter 7 bankruptcy.
That being said, the Consumer Financial Protection Bureau (CFPB) clarifies that a Chapter 7 bankruptcy filing will, in fact, remain on one’s credit report for about 7 to 10 years. However, it should only affect your credit score for about 1 to 3 years.
Chapter 13 Bankruptcy
As Chapter 13 bankruptcy features a financial restructuring process, as opposed to liquidation of one’s assets, the filer will be in a repayment plan for 3 to 5 years based on the filer’s income level at the time of filing.
The discharge is entered upon completion of the Chapter 13 plan, and all the payments have been made as outlined in the debtor’s plan.
Typically, your credit score will start to improve over the course of the Chapter 13 reorganization plan because there should be no more negative reporting on the debt that is being addressed through the provisions of your Chapter 13 plan. The debt-to-income ratio will also improve.
Finding Relief With Professional Help
Understanding how to navigate bankruptcy can often be stressful for filers. Thankfully, you’ll never have to go through it alone when there’s a skilled professional ready and waiting to help you.
Dolaghan Law provides such compassionate assistance, both empowering you to take back control of your finances and rekindling your hope for a stable future. If you’re ready to embark on your journey toward financial renewal, contact Dolaghan Law today by calling (904) 354-4935!