You may have recently heard the term “in bankruptcy.” The way it’s used implies that bankruptcy is not just an action, but rather a condition or state of living. What does this mean? More importantly, what does this mean for you? The term itself refers to the amount of time your bankruptcy is an open case and you are protected by the stay, and this is not always a constant thing. It can differ from bankruptcy to bankruptcy and type to type. It is a good idea to find out how long you will be “in bankruptcy” so that you can make plans for life after bankruptcy.
Utah Chapter 7
This type of bankruptcy generally does not last very long. The average length of time a Chapter 7 bankruptcy stays open is six months, though on rare occasions, it can be open for a couple of years. Because Chapter 7 bankruptcy deals with asset liquidation and the erasure of most debts, there is usually no need to be in bankruptcy for more than a few months. This may not apply to certain Chapter 7 bankruptcies, but in most cases, you can count on a period of months instead of years.
Utah Chapter 13
Chapter 13 bankruptcies usually last longer than Chapter 7 bankruptcies for a number of reasons. Perhaps the most important reason for this is that Chapter 13 is a way to repay some or all of your debt over a period of up to five years. You will therefore be in bankruptcy until your debt is repaid or until five years have passed. Despite lasting for such a long time, you will be protected by your automatic stay until you are no longer in bankruptcy; this can be especially invaluable for a couple or family.
What Does This Mean for You?
Depending on your situation, being “in bankruptcy” may be a very good thing or an acceptable frustration. For those who are worried about how bankruptcy may make them look to lenders and others “in the know,” it may seem like a bad thing to remain in bankruptcy for years, but there are perks: the stay lasts for years as well, and bankruptcy allows debtors to either get rid of their debts or repay them with a payment plan based on their amount of disposable income, so being in bankruptcy takes the pressure off and allows clients to slow down and get their finances in order. Ultimately, the time spent in bankruptcy is neither good nor bad; it is simply the amount of time necessary for you to get your fresh start.
If you have additional questions about Utah Bankruptcy, please Contact Us and set up a free bankruptcy consultation today!