Bankruptcy is a powerful tool that can help people manage their debt or eliminate a vast amount of it. While the benefits of bankruptcy can free a trustee from massive amounts of financial debt, it takes time to experience the benefits of bankruptcy.
Bankruptcy is a complicated matter. Before a trustee files for bankruptcy, they need first to choose which type of bankruptcy they are applying for. The experienced guidance of a bankruptcy attorney can make the process a lot easier, but it can still as long as six months for the bankruptcy to finalize.
Why does it take so long?
From when a client first visits their attorney about filing for bankruptcy, there is a lot they need to do to achieve bankruptcy. Chapter 7 bankruptcy eliminates qualifying debt without any repayment plan, but there is work the trustee needs to do to qualify. Steps that a trustee needs to take include:
- Selling off non-essential assets such as second homes or cars, collectibles, or valuable art or jewelry
- Addressing any lawsuits that the trustee may be involved with that pertain to bankruptcy
- Collecting and providing necessary information and documents. These documents need to establish essential information like any debts, assets, transactions, property the trustee wants to exempt, income, and expenses.
While it typically takes about two months for a trustee to receive their discharge (the court order that eliminates the debt), many things can delay the discharge. Missing information, property issues, and bankruptcy lawsuits related to the trustee’s bankruptcy eligibility can all considerably slow down this process.
Now is the time to start
Any number of things can postpone the bankruptcy discharge. The sooner a trustee reaches out to a bankruptcy attorney, the faster they can receive the discharge they need to beat financial debt.