Bankruptcy – Length

How Long Is The Bankruptcy Process?

The short answer: 9 – 36 months, but, like most things, it depends.

When you declare bankruptcy you become an “undischarged” bankrupt.  After completing the bankruptcy process you will obtain an “order of discharge” which discharges, or releases you from your debt.  The amount of time it takes to obtain your discharge depends on two things:

  1. If you’ve been bankrupt before; and
  2. Your family income.
Prior Bankruptcies

A first time bankrupt is eligible for an automatic discharge after 9 months, while a second time bankrupt is eligible for an automatic discharge after 24 months.

Your Family Income

Bankruptcy is geared to income just like some rent is geared to income: the more you earn, the more you pay.  If your family income exceeds monthly income thresholds then you are required to share a portion of your income with your creditors.  This concept is referred to as Surplus Income.  In addition, the length of your bankruptcy will be extended by 12 months.  Therefore, if you have surplus income a first bankruptcy will take 21 months (9 + 12) while a second bankruptcy will take 36 months (24 + 12).

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