Filing for Chapter 7 bankruptcy can be an intimidating and daunting process. Especially if it's not something you've ever dealt with before, you may not know where to begin or how it ends. Here is an overview of what to expect as you prepare for your Chapter 7 bankruptcy and what happens after your case has been filed with the bankruptcy court.
Preparing For Your Chapter 7 Bankruptcy Timeline
The timing for this part of the process is entirely in your hands. You can move as quickly or as slowly as you're comfortable with when preparing to file.
Find an attorney (if applicable). If your case is complex and you plan to file with an attorney, the first step is to find one. A reliable bankruptcy attorney will help you throughout your Chapter 7 bankruptcy timeline, deal with the nitty-gritty, and answer any questions you can think of. Most bankruptcy lawyers offer free consultations, so it can’t hurt to talk to a few and choose the one you’re most comfortable with.
Complete the paperwork. Your Chapter 7 bankruptcy timeline will greatly depend on how well you prepare all of the necessary paperwork. Completing your bankruptcy petition and collecting any financial documents required for filing is one of the most important parts of the process. This includes collecting things like tax returns, employment history, pay stubs, deeds, and the like. Having an incomplete petition or one that needs revisions could cost you time, energy and money.
Certify that the information is correct. Before your case can be filed, you’ll have to review and sign your bankruptcy forms, certifying the contents of your petition are accurate to the best of your knowledge.
Complete the first credit counseling course. Lastly, you'll need to complete a credit counseling course before you file. Make sure you reach out to an approved credit counseling agency for this requirement, as it won’t count otherwise.
Pay the court filing fee. When you go to file, you will be asked to pay the $335 court filing fee. If you can’t pay that all at one time, you can complete the application to pay the filing fee in installments. In many cases, some people even get this fee waived by showing that they can’t afford to pay it. Usually a fee waiver application is included in your packet when you file. It must be approved by the bankruptcy judge.
After You File Chapter 7 bankruptcy
Once your Chapter 7 bankruptcy case has been filed, it will take approximately 4 months to receive your bankruptcy discharge. The act of submitting your petition to the bankruptcy court starts your Chapter 7 bankruptcy timeline. Here is what happens in the interim:
The automatic stay. As soon as you file, your creditors will be subject to the automatic stay, which prevents them from pursuing debt collection while your case is open. You won't have to worry about constant phone calls or letters.
Creditors’ meeting is scheduled. After you file, the court will send you Form 309A with the date of your creditors’ meeting and the name of your trustee. Your bankruptcy trustee is a federally appointed individual whose job it is to carefully go through your case and ensure your unsecured creditors are treated fairly under the applicable bankruptcy laws. You’ll receive instructions from the trustee on what documents or information to provide to their office in preparation for your creditors’ meeting.
Attending your creditors’ meeting (341 meeting). While the name is a little intimidating and formal, the actual meeting is usually pretty painless. That said, you are still required to attend, and skipping it could result in the dismissal of your case. This so-called Meeting of Creditors is held about 20 - 40 days after your bankruptcy case is filed. For the most part, creditors do not attend these meetings, nor are they required to. During the meeting, you will have to testify under oath that the information presented in your bankruptcy forms is completely accurate. The meeting will usually only last around ten minutes, so while you need to be there with the necessary forms of identification, there's no cause to stress over it too much.
Take your second credit counseling course. At this point, you’ll want to take your second course, the financial management course. As before you’ll have to make sure to take the course through an UST approved provider. Once the court receives your certificate of completion for this course, you’ll have completed all required steps to receive your bankruptcy discharge.
Wait for your discharge. People usually receive their discharge about two months after their 341 meeting. The discharge is the court order that legally eliminates your obligation to pay your debts. This is usually cause for celebration! You did it!
Court closes case. In a no-asset Chapter 7, the court typically closes the case within 30 days from the date the discharge was granted. If the trustee is administering assets, the case will stay open for as long as that process takes. While you remain obligated to cooperate with the trustee, there’s typically very little, if anything, for the filer to do during this stage. So, enjoy your fresh start and be proactive about rebuilding your credit!
Hopefully, after reading this, you have a better idea of how a Chapter 7 bankruptcy timeline flows from beginning to end. It may seem like a lot to take in, but as you begin the process, you’ll realize it’s more than manageable. Whether you decide to use an attorney or not, Chapter 7 bankruptcy doesn't have to be an overwhelming process. Just make sure you have complete paperwork and an understanding of the different steps, and you'll be on your way to a fresh start!