How Long Does a Bankruptcy Case Last? 

 Posted on September 29, 2023 in Pre-bankruptcy Planning

Facing financial hardship is undoubtedly a stressful situation. For people and businesses considering bankruptcy as a solution, it is essential to understand the duration of the bankruptcy process. Knowing that the process is unpleasant but that it does come to an end can help you maintain perspective and optimism. If you are interested in pursuing bankruptcy as a way to get the financial help you need, contact a skilled lawyer to get the process started today.

Factors Affecting the Duration of a Bankruptcy Case

In Texas, several factors contribute to the length of a bankruptcy case. The complexity of the financial situation, the type of bankruptcy filed, creditors' cooperation, and the court's caseload are significant variables that must be considered. Chapter 7, Chapter 13, and Chapter 11 bankruptcies each have their unique features and timelines. 

Length of a Case Involving Chapter 7 Bankruptcy

Chapter 7 bankruptcy or "liquidation bankruptcy" is when non-exempt assets are liquidated in order to pay off creditors. Typically, a Chapter 7 bankruptcy will last about three to six months, making it a relatively short process in most cases. However, the duration may vary depending on the particulars of a given case and the court's schedule. Once the process is complete, most debts are discharged, providing a fresh start for the debtor. 

Length of a Case Involving Chapter 13 Bankruptcy

Meanwhile, Chapter 13 bankruptcy, sometimes referred to as "wage earner's bankruptcy," allows people to reorganize their debts to create a manageable payment plan. Because of this, the duration of a Chapter 13 bankruptcy case is usually three to five years. This extended period allows debtors to repay a portion of their debts over time, following a court-approved repayment plan. Successful completion of the repayment plan leads to the discharge of remaining eligible debts, providing people with a chance to regain control of their finances. 

Length of a Case Involving Chapter 11 Bankruptcy

This form of bankruptcy primarily focuses on business reorganization. It allows businesses to continue their operations while restructuring their debts and financial obligations. Unlike Chapter 7 or 13, Chapter 11 cases can be more complex, involving negotiations between creditors and court approval of a reorganization plan. Consequently, the duration of a Chapter 11 bankruptcy case can vary, lasting from several months to several years, depending on the size and complexity of the business.  

Contact a Schertz, TX Bankruptcy Lawyer

Undergoing financial hardship can be a very isolating experience. However, you do not need to pursue bankruptcy alone. Contact a San Antonio, TX bankruptcy attorney with Law Offices of Chance M. McGhee. Call 210-342-3400 for a free consultation.