Bankruptcy Timeline – in a Nutshell
When considering a Chapter 7 filing one of the concerns people often have is how long the process will take. Chapter 7 Bankruptcy cases have a set schedule of events. Within 90-120 days after the initial filing, cases usually reach completion. Of course, unless problems arise such as form improper filings or a failure to disclose information about assets. Here is the basic bankruptcy timeline listing main events in a typical chapter 7 case:
1. Credit Counseling
Before filing a bankruptcy petition, every debtor must take a Credit Counseling course. And obtain a certificate of completion from the credit counseling agency. Agencies providing the Credit Counseling course must be approved by the U.S. Trustee’s office, which maintains a list of such agencies on the bankruptcy court websites. Our office will provide you with a list at the end of your Initial Consultation. The course will cost less than $30, takes two hours to complete and can be done online.
2. Filing of Petition
The filing of a voluntary chapter 7 bankruptcy petition officially begins the chapter 7 process.
3. Creditors Meeting
Between 20 and 40 days after filing a voluntary chapter 7 petition, a debtor must attend a Meeting of Creditors. This requirement is pursuant to Section 341(a) of the Bankruptcy Code (the “341 Meeting”). At the 341 Meeting, the trustee appointed to the debtor’s case will ask questions. The debtor will give testimony, under oath. The testimony will address the contents of the chapter 7 petition, schedules, A-J and the debtor’s statement of financial affairs. Creditors are notified of the 341 Meeting with an invitation. However, creditors rarely attend the 341 Meeting. In the event that a creditor does attend, it is a good idea to have the assistance of an attorney at the meeting.
4. Financial Management
After filing your petition, you must complete a post-petition Financial Management course. This is very similar the Credit Counseling described above. Within 60 days after the creditors meeting, a certificate of completion must be filed with the court. Failure to do this may result in the discharge not be issued and the dismissal of your case!
5. Notices of Abandonment and Notice of No Distribution
After the 341 Meeting, assuming there are no complications, the trustee will file any appropriate Notices of Abandonment. Debtors are often concerned about what a Notice of Abandonment means. It simply means that the trustee will not take an interest in the property. As a result, the debtor will keep the property. However, this is subject to any creditors with secured liens. Creditors have 21 days to object to the Notice of Abandonment. There usually are no objections. If there are none, after the 21 days elapse, the Court will approve the Abandonment. Thereafter, the trustee will file a Notice of No Distribution.
The Discharge Order is a document that officially terminates the debtor’s legal obligation to pay most debts. The Court enters the Discharge Order 60-90 days after the 341 Meeting.
7. Case Closing
The Court will enter a Final Decree in about 10 to 14 days after the Discharge Order. This ends the case.
PLEASE NOTE – – The above is a simple overview giving a general timeline in an ordinary, individual chapter 7 bankruptcy case. Many if not most cases follow this schedule. However, this does not include any discussion of the multitudes of things that can delay the process if your case is not filed properly or if creditors object to your discharge. The trustee and creditors wishing to object to the debtor’s discharge or to challenge the dischargeability of certain debts have 60 days after the date first set for the meeting of creditors.
Bankruptcy requires total review of finances including all debts, income and assets. Therefore, we recommend that retain an experienced bankruptcy attorney. The attorney will guide you through the complexities of bankruptcy law and procedure. Contact us to help you through the bankruptcy timeline.