How long does bankruptcy last?

How long does bankruptcy last?

A typical bankruptcy lasts a minimum 9 months for a first time filing and for 24 months if you’ve been bankrupt before.

The bankruptcy will usually only be extended for longer than that if any one of the following three things happen.

  1. If you have surplus income – The bankruptcy will automatically be extended a further 12 months.
  2. A creditor requests a court hearing – The most common reason for this is if the creditor has grounds to believe you’ve not disclosed pertainant information to the trustee
  3. The trustee requests a court hearing – The trustee may do this if you have not completed the necessary duties you undertake when you assign yourself into bankruptcy.

The key thing here to remember is that filing bankruptcy is a legal process that carries with it a responsibilty on your part to complete your duties.  It’s not just as simple as “getting rid of your debts”.  The government created the bankruptcy rules to allow you relief from your creditors, in exchange for you agreeing to undertake certain responsibilities. Failure to complete your duties or make the required payments will result in your bankruptcy lasting longer and probably costing more than you thought it would at the out-set.  

If you’re considering bankruptcy, make sure you discuss your duties with the trustee BEFORE you file so you understand the process and what will be required of you.