As bankruptcies go, a Chapter 7 bankruptcy filing is probably the quickest way to obtain fast debt relief. In fact, upon your federal filing, your creditors must immediately stop contacting you and all forms of debt collection must cease immediately. How fast the remainder of your bankruptcy goes depends on your circumstances. To find out what might influence the pace of your debt discharge with Chapter 7, read on.
An Ordinary Filing
It must be mentioned that the vast majority of Chapter 7 filers can expect a very smooth and easy process with no hiccups or issues. The below issues are not the norm. Though the pace with which your bankruptcy proceeds is based on your local federal court backlog, most filers can have a completed bankruptcy case using Chapter 7 in about five or six months from the date of the filing.
Your Income Comes Under Scrutiny
Keeping wealthy filers from abandoning their debt load was the reasoning behind income restrictions in 2005. Now, filers must compare their income with the median income in their state as part of the bankruptcy application process. If you make more than the median, you must undergo something called the means test. This can slow down your filing process, but it doesn't necessarily have to cause unsurmountable problems. Your bankruptcy lawyer will identify and list certain expenses that can, in most cases, explain how your income still prevents you from paying your debts.
You Own a Lot of Property
You are only allowed to own a certain dollar amount in property like real estate, vehicles, and more. You can use state or federal exemptions to reduce the likelihood of problems, but some filers must surrender their property to the bankruptcy trustee. This process may add a few weeks onto things. Speak to your lawyer before you file for a better idea of what will happen with your property.
You Misuse Your Credit Cards
If you are about to file for bankruptcy, be careful with your credit card use. You can still use your cards to pay for food, utilities, medical needs, gas, and other non-frivolous things. However, you can be questioned by your trustee or your creditors if it appears that you took advantage of your filing to charge with abandon. There are dollar limits on your cards, so ask your bankruptcy lawyer about how to safely use them.
Other issues that can delay your discharge include being a business owner, going through a divorce during bankruptcy, and selling or giving away property before you file.
Speak to a bankruptcy lawyer about any of the above and have timely debt relief made possible.