Our Chapter 7 bankruptcy lawyers know: It really depends.
Generally, we may be talking a few months, particularly for a Chapter 7. But a Chapter 13 is going to take years to complete, as you will be put on a repayment plan.
The other consideration is that there may be things to sort out to put you in an appropriate position to file for bankruptcy protection in the first place.
Some of the top reasons why there may be a delay in filing would be:
- A need to protect your assets;
- Income that is too high;
- You have an old bankruptcy.
Let’s explore the first: Assets. Your ability to keep your assets, such as your car, your home and other valuables, is going to depend on the type of bankruptcy for which you file and the unique circumstances of your case.
Kentucky Revised Code Chapter 427.170 allows Kentucky residents to request the same exemptions as those provided under federal law, in 11 U.S.C. sec. 522(d). These include things like your retirement, veteran’s benefits, Social Security benefits, all the way down to clothing, furniture and kitchenware.
That being said, bankruptcy law is very specific, and any attempt to conceal or transfer or omit property from the proceedings is going to result in anything from denial of your bankruptcy to criminal prosecution or civil litigation. So your bankruptcy attorney is going to want to do it right. In some cases, that’s going to mean that immediately filing could put certain assets in danger. It’s important to lay out all your cards with your attorney so he or she can help you determine how to protect the assets you want to keep.
The second thing that might cause a delay would be if your income is too high. This is a particular issue for a Chapter 7 bankruptcy. It’s not uncommon for those battling debt to be scrambling for extra income wherever they can. Those extra overtime hours, freelance assignments or temporary odd-jobs can push your income over the limit that would be allowable for a Chapter 7. In these cases, attorneys sometimes have to put the proceedings on pause to be able to prove that the additional income was only temporary.
Thirdly, a previous bankruptcy can cause a slowdown. With Chapter 7 bankruptcy, you can only file once every eight years. Even if it’s clear you are in need again, you will have to wait to that eight-year threshold. However, if this is your situation, you should still consult with a skilled bankruptcy attorney, who can help you further explore all your options.
The good news is that once you actually do file, an automatic stay will buy you time to stay in your home, allow you to at least temporarily keep your possessions and stop those creditors in their incessant harassment.
If you need to speak to a Kentucky bankruptcy attorney or Louisville foreclosure defense firm, contact the Schwartz Bankruptcy Law Center at 866-270-4495 for a free and confidential consultation to discuss your rights.
Why is Filing for Bankruptcy Taking Forever?! By Justin Harelik, Fox Business