How long does a bankruptcy period usually last?

How long a bankruptcy period usually last depends on the bankruptcy chapter you file. Personal bankruptcy consists of two chapters with different bankruptcy periods. A chapter 7 bankruptcy period usually last approximately four to six months from the time you file. With chapter 7, you petition the U.S. Bankruptcy Courts to eliminate or wipe out your unsecured debts. These debts typically include credit card and medical bills.

Chapter 13 is the second bankruptcy option. Typically, depending on your repayment plan, chapter 13 last between 36 to 60 months (three to five years). When you file chapter 13 you petition the U.S Bankruptcy Courts to allow you to pay your creditors. Under a repayment plan, you’re required to pay a set amount every month to a bankruptcy trustee. The trustee then distributes the funds to your creditors.

Both bankruptcy chapters have an automatic stay. During the bankruptcy period, the automatic stay prohibits creditors from starting or continuing any lawsuits or wage garnishments. Chapter 13 has an extra legal protection within the automatic stay. It protects your home from foreclosure. Thus, the mortgage lender can’t take your home.

There’s a huge difference between foreclosure and bankruptcy. Although foreclosure is a longer process, the end result is that you will lose your home. So, talk with a bankruptcy lawyer about filing chapter 13 and saving your home. If you are not trying to save your home, a bankruptcy lawyer will assist you in filing chapter 7 and wiping out your unsecured debts.