The average Chapter 7 is an uncomplicated process and takes approximately five to six months. A Chapter 7 Bankruptcy is a liquidation process conducted by a bankruptcy Trustee. Bankruptcy law affords certain exemptions which can be used to protect personal assets and real estate. Any non-exempt assets can be liquidated in order to raise money for creditors. It is important to consult with a bankruptcy attorney as soon as you face financial hardship in order to maximize the benefit of the exemptions.
If Chapter 7 is the best option, your attorney will ask you to gather the information needed to prepare the Bankruptcy Petition and Schedules. You will need to disclose all information regarding your income, assets and creditors, among other things.
After gathering the information, your attorney will draft all the documents necessary to file the case. Once everything is prepared, you will review and sign the documents and the attorney will file them with the bankruptcy court. On the day that a Chapter 7 bankruptcy is filed, an automatic stay takes effect and prevents any collection efforts by creditors. This means that creditors cannot sue, garnish or even call you to demand money.
The next major step in the process is the 341 Meeting of Creditors. At the Meeting of Creditors, the Trustee appointed to your case will ask you questions regarding your bankruptcy. The line of questioning will depend on the facts of each case, but the Trustee is generally ensuring that everything filed is accurate. Although creditors have the right to show up and ask questions, this rarely happens. If you believe a particularly aggressive creditor will show up at your Meeting of Creditors, it is important to have an attorney who will provide full representation.
After the meeting of creditors, there is a sixty-day objection period during which time creditors could object to the discharge of your debts. Creditors must have a specific basis for objec While objections are rare, they can cause major complications in a Chapter 7 bankruptcy and should always be handled by an experienced bankruptcy attorney. Assuming there are no objections in a case and any liquidation is completed, a debtor will receive the Order discharging their debts shortly after the objection period ends and the case will be closed.