This is not an easy subject to digest. Going through bankruptcy is never easy. In a way, it is an end to a life you’ve known to that point. When a business dies, a part of the individual who created it and worked hard to make it successful also dies. This is a cycle of life.
Sometimes you fail, and when it comes to business, in most cases a failure means bankruptcy. When it becomes clear that this is the only way out most people think only about one thing. How long does it take to go through a business bankruptcy?
If you’re one of the people who found yourself in a situation like this, thinking about time is normal. The situation is not dire, and you at least need to know when everything will end. Most situations like this one are stressful. When you’re under stress the time flows slower.
Of course, this is a subjective feeling as time is relative and it flows the same at all times. Nonetheless, during the process of bankruptcy, you’ll be overwhelmed by all the obligations you’ll have on your part. What you deserve is to know when it will all be over. In this article, we’ll try to cover, the best way we can, the timeline of one business bankruptcy.
Which Type of Bankruptcy Do You Need?
First of all, you need bankruptcy to cover what you’re going through. If you’re filing for bankruptcy for a business you’ll most likely be using Chapter 7 bankruptcy. There might be exceptions, but this is the most common way of doing things in the business domain. Don’t worry, this is good news. Of course, you might not see it that way, but it could always be worse.
First of all, the benefits are that all of your debt is going to be wiped out. This will be done without the need to go into a repayment plan and have to pay for it. To see if you’re qualified for this type of process, you’ll need to pass a means test.
Furthermore, you’ll be allowed to keep all your property, necessary for living and maintaining a home, and your job will be secure. Of course, there are going to be things you won’t be able to protect as declared by Scura Law, but that’s for another discussion.
How Long Does It Last?
In most cases, there is no set deadline, but it rarely takes more than half a year. Chapter 7 mostly comes without any deeper issues, and the process should be straightforward. In the majority of cases, the length will depend on the local courts and their eagerness to push through the process. Of course, you’ll be tasked with completing most of the work if you fail to arrange legal help. Below, we’re going to explain what your obligations are.
First of all, you’ll need to gather all the needed paperwork. The court needs to receive the full paperwork regarding your case to start with the proceedings. Most of the papers you’re going to file are focused on your financial well-being. Things such as your income, transactions, and matters of property all need to be listed. Once you’ve handled this part, you need to attend the famed 341 creditors’ hearing meeting.
The moment the court has your files, all activities by collectors need to be seized. When that happens you’ll be called to court appearance which is dubbed as 341 meeting of creditors hearing. You can expect this call one month after filing, or forty days at most. During this hearing, you’ll be asked a string of questions by a bankruptcy trustee and maybe some of the creditors. This meeting shouldn’t worry you too much. While you’ll be taking an oath, it won’t last longer than that couple of minutes.
While the part from above might be over swiftly, there might arise a few additional questions. Your trustee has the right to seek some additional information. Many court filings are missing some vital information or documents. You’re not in the wrong if you forgot, but if the trustee notices that something is missing they’re entitled to look for additional documents.
In most cases, these are things such as a social security number, or a driver’s license. In case the documents that are missing are some of the identifying ones your hearing can be postponed. Once everything is in place the hearing can be completed. If something is permanently wrong your case can be dismissed. Either way, these proceedings never last longer than 30 days.
Once the ordeal with the creditors is over you’ll need to complete your financial management course to receive a certificate in this domain. This is one of the two courses that need to be completed for you to be discharged. After the meeting with the 341 creditors is over you have a deadline of sixty days to compete for this task.
While this is a serious issue, like all bankruptcies are, as you can see the conditions you need to meet are quite achievable and fair. If everything goes according to plan, and you meet your conditions everything can be over after these last sixty days. When you put it all together you get several days close to four months, and that is your answer. It takes you four months to go through business bankruptcy.
Can It Last Longer?
While this is not a common practice, yes, it can last longer. If your case isn’t closed in less than five months you’re most likely facing a delay. When it is short-term it is never longer than an additional month.
Everything above this is deemed as a moderate delay and it can take a few additional months. Mostly this happens due to unresolved property issues. Last but not least is the long delay which can take up to six months to a full year of delay. When this happens you’re most likely facing a lawsuit of some sort, and the legal help we mentioned above might be just what you need.