How Long Will a Chapter 7 Case Require to Complete?

For those who are facing the stress and instability of financial obligations they cannot completely meet, the Constitution and many state laws have provided means by which they can find relief.  This relief is primarily found in the bankruptcy code, with chapters on each of several types of bankruptcy from which to choose.  The most common types of bankruptcy are:

Chapter 7 – which is basically a liquidation of any personal property that is non-exempt, as well as a discharge of most consumer debt

Chapter 13 – which is a reorganization of the finances of an individual or business to enable them to pay off their debt in 3 to 5 years

The process for a chapter 7 bankruptcy includes a number of filings and requirements to provide the court with a great deal of personal and financial information.  However, a chapter 7 bankruptcy can often be concluded in a matter of two to six months.

Legal Steps to Chapter 7

While an individual or small business can legally file for chapter 7 bankruptcy on their own, there are many details to consider and choices to make along the way.  A bankruptcy attorney can provide powerful insight to help the filer make wise decisions and obtain the greatest benefit from chapter 7 in a timely manner throughout this process:

• Credit counseling is required for 6 months prior to filing; however, this may be approved for a shorter period if there is justification to do so
• File a chapter 7 petition with the bankruptcy court in the filer’s locale.  Include financial information about the debtor’s assets and liabilities, income and expenditures, executory contracts, and unexpired leases
• The assignment of a bankruptcy trustee that takes over the finances of the debtor – generally 1-2 weeks after filing.  The debtor must also provide the trustee with their most recent tax return
• A 341 meeting with creditors which the debtor must attend in order to present the plan by the trustee, the debtor, and their attorney – usually takes place 20-90 days after filing
• The trustee confirms the debtor’s ability to file chapter 7 or recommends they file chapter 13
• Any non-exempt property is liquidated (or sold) to satisfy creditors
• Secured property is either repossessed or reaffirmed
• The debtor completes their required Financial Management Course
• Final chapter 7 hearing takes place – although the debtor is not required to attend – granting any approved discharge of debts
• Confirmation that the case is closed and that the debtor is no longer liable to most of their creditors

Legal Assistance

Within each step of the bankruptcy process there are benefits and consequences that the debtor must consider.  Many laymen may not even be aware of their options, which is why it can be of great benefit for a debtor to have the guidance of an experienced bankruptcy attorney to protect their rights and ensure wise choices.