Personal bankruptcy proceedings can take months or years to complete. Depending on the type of bankruptcy filed, the process may take anywhere from roughly half a year to more than five years.
While filers must wait until the end of the bankruptcy process to discharge their eligible debts, they have immediate protection from collection efforts after they file. The automatic stay granted during bankruptcy prevents creditors from continuing to call or pursue collection-related lawsuits.
How long can filers rely on the automatic stay to protect them from collection efforts?
Each bankruptcy case is unique
As a general rule, the automatic stay granted by the courts takes effect immediately and persists until the courts either dismiss the case or grant the filer a discharge. However, there are some scenarios in which the protection of an automatic stay may last for substantially less time.
If a filer has previously filed a bankruptcy case in the last 12 months and the courts dismissed it, the automatic stay may only remain in effect for the first 30 days. If the filer has two or more dismissed bankruptcy cases from within the last year, the courts may not extend an automatic stay at all. Finally, if creditors initiate adversary proceedings in response to a bankruptcy, they can theoretically ask the courts to lift the automatic stay so that they can continue their collection efforts.
Working with a bankruptcy attorney can help filers understand their protections and maximize the relief they secure through a bankruptcy filing. Assistance from a legal professional reduces the likelihood of complications, such as a dismissed case.