Personal bankruptcy can be a daunting and complex process, but for many individuals facing overwhelming debt, it can be a helpful and necessary step toward financial freedom and stability.
In Pennsylvania, as in the rest of the United States, there are two primary types of bankruptcy under which people can file: Chapter 7 and Chapter 13.
Understanding the nuances of each and the general timeline of the proceedings can help answer the question of how long the proceedings take from start to finish.
Chapter 7
Chapter 7 bankruptcy is for people with limited income and significant unsecured debt. In this process, the court appoints a bankruptcy trustee to liquidate the debtor’s non-exempt assets, distributing the proceeds to creditors. The court then discharges the remaining qualifying debts, providing the debtor with a fresh financial start.
The timeline for Chapter 7 bankruptcy proceedings typically spans three to six months. However, the actual duration can vary based on factors such as the complexity of the case, the court’s caseload, and the cooperation of the debtor in providing the necessary documentation.
Chapter 13
Chapter 13 bankruptcy, also known as “reorganization” bankruptcy, is an alternative for individuals with a regular income who want to repay their debts. Under this chapter, a debtor proposes a three-to-five-year repayment plan to the court, outlining how they intend to repay creditors.
If the person completes the plan successfully, the court discharges the remaining qualifying debt. Unlike a Chapter 7 bankruptcy, a Chapter 13 bankruptcy involves an extended process that can take much longer. The court must approve the repayment plan and the entire process lasts between three to five years.
Other factors to consider
The level of cooperation between the debtor, their attorney, and the bankruptcy court are factors that can have a direct impact on the timeline. If there are issues or challenges that arise during the proceedings, that can extend the process as well.
Navigating personal bankruptcy in Pennsylvania requires a comprehensive understanding of the options available and the associated timelines. Both Chapter 7 and 13 bankruptcy types offer distinct paths to debt relief and financial freedom, each with its own advantages and disadvantages. It is critical to understand what those are for each type and which one is the best option for you personally.