The Chapter 7 Bankruptcy Timeline

Often called the "fresh start" bankruptcy, Chapter 7 is generally on a 4 to 6 month timetable. However, the timeline for Chapter 7 bankruptcy can vary greatly depending on the specific details of each case. Here is a general overview of the typical timeline:

1. Consultation with an Attorney

The first step to filing for bankruptcy is to become informed of your options. A consultation is the initial meeting with the attorney to receive an overview of what the bankruptcy process would entail for your specific circumstances. This meeting is usually about 30-60 minutes at no cost. Give us a call to schedule your free consultation.

2. Information Gathering

Generally, during the consultation, you will have a conversation with the attorney about the specific financial circumstances that are affecting you and the attorney will be able to provide you with guidance regarding your eligibility for Chapter 7. To take the next step, the attorney will provide you with a checklist to identify what financial documents you will need to provide so that the attorney can confirm eligibility for Chapter 7 and begin working on the bankruptcy petition.

These documents typically include: 1) your two most recent tax returns; 2) your paystubs for the past 6 months; 3) information about your debts and creditors; 4) your car(s) VIN; 5) and your monthly expenses.

3. Pre-filing Credit Counseling (Within 180 days before filing)

Before filing for Chapter 7 bankruptcy, individuals are required to undergo credit counseling from an approved agency. Credit Counseling can be completed online and takes about 30 minutes to an hour. This is meant to help debtors explore alternatives to bankruptcy.

4. Signing Day

This is the final meeting before the filing of the bankruptcy petition. It is the day where you review and acknowledge all the information on the petition as accurate and correct. Because bankruptcy is a powerful tool, it is incredibly important to be truthful and transparent with the information provided to the bankruptcy court. Signing day can take upwards of an hour.

5. Filing the Petition (1st Day)

After Signing Day, the attorney files a petition for Chapter 7 bankruptcy with the bankruptcy court. This marks the 1st day of the bankruptcy process.

Upon filing, an automatic stay goes into effect, which prohibits creditors from taking any further collection actions against the debtor. This includes harassing phone calls, wage garnishments, and lawsuits.

6. Meeting of Creditors (341 Meeting) (~30 Days from Filing)

Approximately 30 days after filing, the debtor must attend a meeting of creditors, also known as the 341 meeting. During this meeting, the trustee and creditors have the opportunity to ask the debtor questions about their financial affairs. In many cases, this is the only time the debtor needs to appear in court. In Tennessee, most if not all, meeting of creditors are currently being held over ZOOM. Your attorney will provide you with lots more instruction regarding this meeting.

7. Liquidation of Non-exempt Assets

The appointed trustee evaluates the debtor's non-exempt assets, which may be sold to pay off creditors. However, frequently Chapter 7 filers don't have non-exempt assets, and in such cases, there may be no assets available for liquidation.

6. Discharge of Debts

Typically, within 60 to 90 days after the 341 meeting, the court grants a discharge, releasing the debtor from personal liability for most debts. Certain types of debts, such as student loans and certain tax debts, may not be dischargeable. I have a separate article that touches on this subject if you want to learn more.

7. Case Closure

After the discharge is granted and any non-exempt assets have been liquidated and distributed to creditors, the court closes the bankruptcy case. This marks the beginning of your debt free journey.

CONCLUSION

It's important to note that the specific timeline can vary based on the complexity of the case, local court procedures, and other factors. Additionally, changes in bankruptcy laws or procedures may impact the timeline. If you are considering Chapter 7 bankruptcy, get in touch with me so that we can schedule a free consultation and provide guidance tailored to your specific situation.

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