Most individuals who file for bankruptcy choose to file for Chapter 7 bankruptcy relief. If you are unsure about which bankruptcy relief is right for you, contact your attorney who has experience in dealing with a variety of bankruptcy cases and can help guide you in the right direction.
In general, you can expect the entire process to take about four months. Here are the steps in a Chapter 7 bankruptcy case:
File a bankruptcy petition. Your case begins once you file a petition for bankruptcy with the court. This petition will need to contain documents that show the state of your financial life: income verification, expenses, debts, properties, etc., as well as proof that you completed a credit counseling course within the last six months.
You receive an automatic stay. The automatic stay will be put in place immediately once you submit your petition successfully. The automatic stay tells all of your creditors and lenders that they must cease all debt collection attempts immediately. This includes any attempt to collect money, as well as place new liens on your property, as well as most attempts at repossession or foreclosure. The automatic stay will be in place for the duration of your case, or until your debts are discharged.
Meeting of creditors. You will meet with a trustee and potentially any creditors you owe in order to answer questions about your identity and the state of your finances. You will have to provide paperwork that supports the claims made when originally filing your bankruptcy petition.
The financial management course is completed. You will be required to complete a financial management course in addition to the credit counseling course needed to file for bankruptcy in the first place. This step is integral to the bankruptcy process, as your debt won’t be discharged unless this course is completed.
Debt is discharged. Once all of the first steps are completed, your eligible debt will be discharged and notice will be sent to all your creditors that they cannot again attempt to reclaim or collect that debt.
The case is closed. Generally speaking, your case will be closed out fairly quickly after your debt has been discharged. However, there are some unique situations that would prevent your case from being closed right away, such as your trustee needing more time to distribute any non-exempt assets collected or being involved in any bankruptcy litigation.