One of the primary questions I get as a Cumming, Georgia bankruptcy lawyer is how long does it take to recover from bankruptcy. While the financial fallout and rebuilding of credit will vary by person, so too will the emotional fallout.
Understandably some people are a nervous wreck throughout the process while others are actually quite glad to see me and get their case processed and done with. Those who have the easiest time dealing with their bankruptcy are completely emotionally committed to the process. Those sort of dipping their toe into the water, have a harder time with their case. Based on this, my advice is to not file bankruptcy until you are 100% sure this is the right step.
The typical chapter 7 case lasts 4-6 months. As I explain to my clients, about 75% of the effort is put into the filing of the case. Once the case is filed, the debtor certainly has to appear in court for their meeting of creditors and take a financial management course, but those are relatively simple requirements. The hearing is usually five minutes and the trustee questioning the debtor usually respectful of the debtors’ situation.
Various motions or request for documents could be filed during the case, but these usually don’t require too much effort of the debtor, if any. The debtor also might sign a reaffirmation agreement along the way. I usually tell my clients after their trustee meeting that “no news is good news” and basically just go on with your life and expect to get a discharge in 2-3 months. This usually puts them at ease.
Even though they have not yet secured their discharge, the fact that their court appearance is done, the required paper work has been completed, their court costs and attorney fees have been paid and creditors are not sending them letters or making phone calls, is enough to put them at ease even though they don’t yet have the discharge.
Post discharge I occasionally communicate with my clients and they usually express happiness that the process is over but no regret that they decided to file. While they know if they are applying for a new loan or a new apartment lease, they might have to deal with the fallout from the pulling of a credit report that reveals a bankruptcy filing, the ones that deal with it best are the ones that know the issue might occasionally creep into their lives, but it’s not in the forefront like it was prior to their filing.
A chapter 13 process is a different animal, as it is a 3-5 year repayment plan. Unlike the chapter 7 meeting of creditors, the chapter 13 client’s meeting of creditors is more involved, as the testimony there impacts the debtor’s monthly trustee payment. The typical chapter 13 debtor is therefore more on edge about his/her case until it finally gets confirmed.
Once it gets confirmed, the debtor hopefully enjoys some normalcy again as he now has a set monthly payment he delivers to the trustee. Of course anything can upset that, like a medical emergency, and the debtor often needs adjusting to the plan. So the chapter 13 debtor can’t move away from the experience nearly as quickly as the chapter 7 debtor, because the 13 debtor is in it much longer. That being said, the chapter 13 debtor probably has more income than the typical chapter 7 debtor. He often has a good employment situation, which enables him to not be as stressed as a chapter 7 debtor would be trying to pay monthly living expenses.
This article was written by Peter Bricks, who is a Jonesboro, Georgia bankruptcy attorney with satellite offices in Atlanta and Cumming, Georgia.
Image courtesy of Leo Reynolds.