The length of your bankruptcy process will depend on the type of bankruptcy you decide to file. For a Chapter 7 bankruptcy, the process typically takes four to six months from the initial filing to the final discharge. In a Chapter 13 bankruptcy, your repayment plan will take three to five years, based on the details of your plan.
This post provides general guidance on the timelines for both kinds of bankruptcy.If you are considering bankruptcy debt relief in Arizona, Stone Rose Law can help. Call us at (480) 739-2448 or use our online contact form to ask an experienced bankruptcy lawyer a question or schedule a free consultation.
There are two mile-markers for Chapter 7 cases. The first is the discharge order, the order against your creditors stating they can no longer collect and the debt is discharged. Absent any complications, the Chapter 7 bankruptcy process usually takes about four to six months to discharge from start to finish. The second marker is the closing of the case. This period can vary depending on the complexity of the bankruptcy case.
A simple “no asset” Chapter 7 bankruptcy, in which the petitioner has no personal property or financial assets that can be liquidated, may take only a few weeks to complete after the discharge. The more assets you have, the longer the process may take. Some cases can stay open for up to two years, while most close within one year.
Chapter 7 bankruptcy, also known as liquidation bankruptcy or fresh start bankruptcy, officially starts when you file your petition with the bankruptcy court and pay the filing fee.
However, before you file, you will need to prepare. This involves gathering documentation to support your petition and completing an approved credit counseling course no more than 180 days before filing.
*Some supporting documentation includes:
*This is the basic list. Depending on your circumstance, additional documents may be required. Examples include social security award letters, VA benefit letters, retirement account statements, mortgage statements, copies of lawsuits, stock option letters, annuity statements, business profit and loss, vehicle title, and vehicle registration.
The petition in bankruptcy is actually a packet of several bankruptcy forms, some general and some specific to the state of Arizona’s bankruptcy court.
In the petition, you must disclose your assets and reference the statute exempting them from liquidation under Chapter 7. This is also where you list your creditors, assets, income, and spending.You’ll also need to complete a statement of financial affairs detailing some financial background.
If you hire a bankruptcy lawyer, your attorney will prepare the petition forms for you and review each section with you.
When you file the petition with the court, you must pay the required filing fee under 28 United States Code Section 1930. The local rules of the Arizona bankruptcy court allow you to apply to pay the fee in installments or, in some cases, to request a waiver of the filing fee.
Once you file the bankruptcy petition and pay the required fee, the next step is for the bankruptcy court trustee to set a meeting with creditors, also known as a 341 Meeting. This usually happens 30 to 45 days after the petition filing date. During this period, many petitioners have taken the opportunity to complete another required financial management course.
After the meeting of creditors, a waiting period applies during which:
This period takes up to 60 days.
If no creditor objects to the petition, then the court can take up to another 15 days to discharge your debts and close your case.
So, when you add up the time periods above, the ordinary process takes up to 120 days, or the equivalent of four months.
In addition to cases in which you have many kinds of assets that need to be sorted out to identify those that can be liquidated and those exempt from liquidation, other factors can contribute to delays in processing a Chapter 7 bankruptcy case. These include:
Compared to a Chapter 7 bankruptcy, Chapter 13 bankruptcy cases take longer to resolve. This is because you are in a debt repayment plan that can take three to five years to complete.
The Chapter 13 bankruptcy timeline looks different from the Chapter 7 bankruptcy process in a few ways.
Like with a Chapter 7 bankruptcy, you must prepare before filing, including gathering supporting documentation and completing an approved credit counseling course no more than 180 days before filing.
You must file your Chapter 13 bankruptcy petition with the Chapter 13 Plan and pay the required filing fee. If you have a bankruptcy lawyer, your attorney will prepare the petition forms and review them with you. Once you file the petition, the bankruptcy court will assign a trustee to your case.
Before the 341 meeting of creditors takes place, you must provide documents to the Trustee. These include:
Before the 341 meeting, you must begin making payments to the trustee under the proposed debt repayment plan.
This meeting takes place about 45 days after you file your petition. You, your attorney, the trustee, and your creditors will attend. (Note: creditors rarely attend.) The purpose of this meeting is to allow the creditors and the trustee to ask questions. The trustee has a standard list of questions they are required to ask that your attorney can provide this list before your meeting. These meetings are quick and informal. Detailed questions are generally requested through your attorney, through an objection, or the trustee’s Recommendation/Objection.
The Confirmation of the Chapter 13 Plan
After the claim and objection period passes, the trustee files a plan recommendation/objection. A proposed stipulated confirmation order must be submitted within thirty (30) days of this filing. The stipulated order is drawn up for signature by the debtor, the debtor’s attorney, any objecting creditors, and the trustee. Once everyone has signed the proposed order, it goes to the bankruptcy judge for approval. The Chapter 13 Plan is considered confirmed once the Judge approves the order.
Once you have a confirmed repayment plan, you will follow the payment schedule. This process can take three to five years to complete.
Once your payments are complete, the bankruptcy court will issue a final discharge of your remaining debt balances.
You can see a chart of the Chapter 13 bankruptcy discharge process that the federal government has made here.
If you want to know the status of your case during your bankruptcy petition process, you can call the Voice Case Information System (VCIS) at 1-866-222-8029.
To access your bankruptcy case information under VCIS, you will need to have any of the following:
If you wish to follow your Chapter 13 Case over the three to five years, all Arizona Chapter 13 Trustees use the National Data Center. You can create a user profile to track payments, disbursements, and claims.
To summarize, from filing your petition to receiving your discharge order, Chapter 7 bankruptcy cases typically take four to six months, while Chapter 13 bankruptcy takes three to five years.
Learn more about your options with our resource pages for Chapter 7 bankruptcy, Chapter 13 bankruptcy, and the bankruptcy process.
If you want to get your financial situation under control, call Stone Rose Law at (480) 739-2448 to talk with an experienced bankruptcy attorney or use our contact form.
