The Time Factor in Becoming Debt-Free: A Deep Dive with Prof. Hernandez
When individuals face the crushing weight of debt and bankruptcy, the most common question I encounter isn’t “How much will I pay?” but rather, “How long until this is over?”
In my observation over decades with thousands of clients, I’ve observed a consistent “Time Paradox” in debt management: It’s common for debtors to spend years, sometimes decades, treading water financially with their credit score dropping each month just to avoid a 4-month legal process that requires a 5-minute hearing. Understanding the reality of bankruptcy is the first step toward reclaiming your financial future.
By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).
Updated on February 15, 2026.
Listen: The Professor’s Audio Briefing.
The Cost of Hesitation: Time is Money
Before we look at the court’s clock, we must look at your own. Every month spent making minimum payments on high-interest credit cards is a month added to a “debt-free date” that may never actually arrive.
Mathematically, if you owe $30,000 at 22% interest and only pay the minimum, your timeline for freedom is approximately 30 years. Bankruptcy doesn’t just shorten this; it terminates it.
Chapter 7: The Liquidation “Sprint”
For those who qualify under the Means Test, Chapter 7 is the fastest way to eliminate your debt and get a “Fresh Start.”
Immediate Relief: The moment your petition is filed, the Automatic Stay goes into effect. This instantly halts collections, foreclosures, and garnishments.
The Discharge Window: Typically, a Chapter 7 case moves from filing to a final discharge of debts in 4 to 6 months.
The Sooner the Better: Chapter 7 bankruptcy is quick, and you can begin rebuilding your credit almost immediately.
Professor’s Note: Chapter 7 bankruptcy, in part, depends on the Means Test, which averages your income over a period of 6 months. If your income is below your state’s average, then you passed the Means Test. The income figures are updated twice a year. You can find the latest figures for your state here.
Chapter 13: The Reorganization “Marathon”
Chapter 13, often referred to as a wage earner’s plan or reorganization, is often viewed as a “penalty” because of its length, but it’s the best option to catch up on missed payments for secured debt such as a car loan or mortgage, and to keep non-exempt assets.
Chapter 13, often referred to as a wage earner’s plan or reorganization, is often viewed as a “penalty” because of its length, but it’s the best option to catch up on missed payments for secured debt such as a car loan or mortgage, and to keep non-exempt assets.
The 3 to 5 Year Plan: Depending on your income relative to the state median, you will enter a court-mandated repayment plan.
Why the Duration Matters: This timeframe allows you to cure mortgage arrears or pay down non-dischargeable tax debt under the protection of the court.
Finality: At the end of the 36 or 60 months, any remaining eligible unsecured debt is discharged.
The 7-Year Myth vs. The 10-Year Reality When it Comes to Rebuilding Credit
A common deterrent is the credit report “stigma.” While a Chapter 7 filing remains on your report for 10 years (7 years for Chapter 13), this is a temporary barrier.
In reality, and I’ve experienced this with my clients, even though bankruptcy is listed on your credit report, most debtors see a significant rise in their credit scores within 12–24 months of discharge because their debt-to-income ratio has been radically corrected.
In addition, creditors know that you cannot refile for bankruptcy for another eight years, so they offer credit cards soon after your bankruptcy has been discharged. While the credit line is minimal, typically $200-$500, you will slowly but surely rebuild your credit. My clients have bought cars and homes two years after filing for bankruptcy.
The Professor’s Final Analysis
Time is a finite resource. If the repayment of your current debt exceeds five years, you are not “managing” your debt; you are being managed by it. Bankruptcy is the only legal tool designed to give you back those years.
Don’t measure the “time factor” by how long bankruptcy stays on your record. Measure it by how many years of your life you are willing to trade for interest payments.
Professor Hernandez is an attorney specializing in consumer finance and debt relief. He is the published author of Consumer Bankruptcy Law (Routledge Publishing) and teaches law and finance courses in both English and Spanish for an international university.
Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. Paralegals and students who are buying single copies can do so via Amazon Books. To access my YouTube channel, click this link.
You can learn more about filing for bankruptcy and the bankruptcy petition via this link. Information on the bankruptcy court system, contact information for trustees, and your state’s exemptions can be found here. The federal bankruptcy exemptions are listed here. The latest version of the 341 Meeting of the Creditors can be found here.
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Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.
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