Bankruptcy is all about getting the debtor a fresh start. So how long does it take to get that fresh start? A typical Chapter 7 bankruptcy case lasts about 4-6 months.
However, if your case has some abnormal issues, like assets to liquidate or a trustee or creditor objection to your discharge, then it could last much longer. Some cases even remain open for several years. An experienced attorney should be able to identify before the case is filed whether your case is likely to be quick or not, provided you have disclosed everything.
There are two main elements to a Chapter 7 case. The first one is the discharge. The debtor will meet his/her trustee about six weeks after the case is filed in what’s called a 341 meeting. The debtor cannot be discharged until at least 60 days after this meeting. If 60 days have passed after this meeting without a creditor or the trustee objecting and the debtor having completed and filing the financial management certificate, the debtor should then get a discharge fairly shortly thereafter.
If however, someone has either filed a complaint objecting to the debtor’s discharge or asked and received an extension to do so, the discharge can be held up indefinitely.
The second element of the case is the distribution of assets. The usual Chapter 7 case has no assets to distribute, but that’s not always the case. The debtor could have transferred something of value to a relative or friend too close to the filing, or the debtor himself have more assets than he is allowed to keep. In either scenario, there could be a liquidation of assets.
If there are no assets to liquidate, the case will usually close with the discharge order. If however, there are assets to liquidate, the debtor might be discharged while the case remains open to distribute those assets. Like the wait to get a discharge, the distribution of assets could also theoretically go on indefinitely.
The bottom line for debtors is they should be up front with their attorneys of all the details of their case. If so, the attorney can identify the impediments to the debtor getting a simple no-asset case with discharge, and the debtor might in turn consider filing chapter 13 or not even filing at all, depending on the circumstances.