Filing Chapter 7 Bankruptcy
If you’re thinking about filing Chapter 7 bankruptcy to relieve yourself of debts, you’re probably interested in learning more about what you can expect from a Chapter 7 case – and you’ve come to the right place.
While Chapter 7 cases tend to move quickly, with most petitioners getting a discharge within six months, actually filing your Chapter 7 bankruptcy papers is not the first step you’ll have to think about. So take a few moments to review this timeline and figure out what’s ahead if you do choose to file for Chapter 7 bankruptcy.
Before Filing a Chapter 7 Bankruptcy Petition
- 8 Years Before: A minimum of eight years must pass between petitions under Chapter 7 of the U.S. Bankruptcy Code. You may be eligible to file Chapter 7 just six years after a Chapter 12 or 13 discharge, depending on your repayments.
- 1 Year Before: Any attempts at hiding or destroying assets in an attempt to
protect them from creditors, as well as any payment in full to a creditor (such as a family member or friend) within one year of filing Chapter 7, will make you ineligible for this type of bankruptcy protection. Any property/assets you tried to get rid of could be collected and used to repay your creditors.
- 180 Days Before: In this time period, you must receive a Credit Counseling Briefing from an accredited nonprofit budget and credit counseling agency. This is one of the requirements introduced by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
- 90 Days Before: You must live in the state where you want to file for at least 90 days to gain eligibility. Further, repayment of debts to family members or friends is considered “unlawful preference,” and is not permitted. Certain debt incurred in this period (e.g. for acquiring luxury goods) is considered non-dischargeable by the bankruptcy court.
Your Case Is Filed!
When your bankruptcy lawyer files your paperwork with the court, your Chapter 7 case officially begins. You can expect the following three things to happen at the time your case is filed:
- The automatic stay goes into effect, halting all collection actions against you. This means that you’re protected from repossession, garnishment, foreclosure and lawsuits.
- Everyone you owe money to (your creditors) receives notice that you’ve filed Chapter 7 bankruptcy.
- A bankruptcy trustee is assigned to your case. Your trustee, who works for the federal government, is responsible for reviewing your petition and scheduling the meeting of your creditors.
Your Chapter 7 Case: the Next Six Months
After filing your Chapter 7 petition, your case should move pretty quickly, but you’ll still have many steps to complete before you can get your discharge.
- 15 Days after Filing: Within this time, you’ll have to file schedules detailing your debts, assets, expenses, income and statement of affairs. Also within this time, the court will mail a Notice of Commencement of Case to all your creditors. The Notice will include the date for the Meeting of the Creditors and the deadline for creditors to object to any debts listed in your case.
- 30 Days after Filing: Within this time, you’ll have to file your Statement of Intention, which details how you intend to handle collateral you have for loans. In other words, you’ll have to report whether you plan to reaffirm secured debts (like that for your car), redeem your property or surrender it. You must serve a copy of this Statement on your trustee and all creditors. You then have 45 days to take the actions outlined in the Statement.
- 6 Weeks (42 Days) after Filing: The Meeting of the Creditors takes place. You’ll need to get a copy of your most recent tax return to your trustee and any creditor who requests it a week before the meeting. You’re required to attend the meeting and testify to the truth of the statements in your Chapter 7 petition. Usually, these meetings are quick and informal affairs.
- 45 Days after Filing: Within this time, you need to file a statement with a certificate from your lawyer verifying that you were told about the bankruptcy chapters available to you. You’ll also need to file a statement of any income from your employer within 60 days of your filing, an itemized receipt of your monthly income and an estimate of any increases in income/expenditures you expect in the next 12 months.
- 30 Days after the Meeting of the Creditors: During this time, your trustee can object to any exemptions you claim in your petition. Similarly, your creditors can object to any debts you listed.
- 60 Days after the Meeting of the Creditors: During this time, your creditors can object to the discharge of any debts listed in your petition and schedules. Generally, you can expect objections if you engaged in questionable or illegal activity at some point in relation to the debt.
- 90 Days after the Meeting of the Creditors: Creditors (except government entities) have this time to furnish evidence to support their objections to discharges.
- 180 Days after the Meeting of the Creditors: Government creditors must submit their evidence within this time.
File Chapter 7 Bankruptcy with Help from a Bankruptcy Lawyer!
If you’re overwhelmed by all these dates and requirements, don’t worry. A bankruptcy attorney practicing in your area can help you make sense of the bankruptcy process. To contact a local bankruptcy lawyer today, just fill out our free online case evaluation form.
The above summary is not legal advice. Laws may have changed since our last update. For the latest information on bankruptcy laws, speak to a local bankruptcy lawyer in your state.