Timeline For Bankruptcy Discharge Without Litigation
Timelines for bankruptcy discharge without litigation vary depending on the chapter of bankruptcy filed.
Chapter 7 is generally the most straightforward and fastest bankruptcy method, potentially taking only 90 to 120 days. However, Chapter 7 is more complex for business or commercial enterprises and can easily take up to six to nine months, possibly even longer, depending on the complexity of the specific case.
Chapter 13 is typically a three to five-year process. It is exclusively for a consumer or individual debtor. After filing the bankruptcy, filers will need to submit a payment plan. Approval for this plan can take three to four months. After filing, filers must make payments to the trustee for three to five years before being discharged.
Timelines for Chapter 11 vary greatly based on the type of debtor and debt. This type of bankruptcy is used primarily by businesses, but individuals may also file. A “standard” Chapter 11 for smaller businesses generally takes one to three years, whereas it could take much more for large and complex businesses. Sub-Chapter V small business bankruptcies typically take six to nine months to complete.
Most bankruptcy cases do not have accompanying litigation. Many bankruptcies, particularly business bankruptcies, involve disputes about claims and fights between a debtor and the trustee, creditors and the trustee or debtor within the bankruptcy itself. Nevertheless, very few involve bankruptcy litigation.
Bankruptcy litigation occurs when an adversary proceeding is filed. That litigation then proceeds as a separate litigation matter under the bankruptcy framework. Litigation can drastically affect a bankruptcy case, including determining whether you can obtain a discharge or even complete the bankruptcy. In other cases, the litigation may not have any major effect on the bankruptcy.
Typically, most bankruptcy litigation involves a particular creditor of the debtor seeking to exclude that creditor’s debt from the debtor’s discharge. Put more simply, the usual litigation is a creditor claiming that their debt is not subject to the debtor’s discharge and the creditor should be able to collect the entire amount of debt.
For more information on Timeline For Bankruptcy Discharge Without Litigation, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (205) 506-3354 today.