Chapter 7 Bankruptcy: What are the Steps?

A Chapter 7 bankruptcy typically takes about 4 months from filing date to discharge date.

Below are the steps in a typical Chapter 7 bankruptcy.

. . . . . . . . . . . . . . . . 

Free initial phone consultation

  • We offer a free, initial phone consultation. The free consultation gives general information about the different kinds of bankruptcy and gives preliminary feedback as to whether bankruptcy can help with your particular situation.

Intake Meeting

  • We offer intake meetings in person at one of our offices or on ZOOM.
  • We will ask you to complete some online questionnaires and bring some documents with you to this meeting. (You can upload them to our secure client portal ahead of time if your meeting is on ZOOM.)
  • We will review the supporting documents and questionnaire responses with you at the meeting.                                   

Bankruptcy document review and signing appointment

  • We will review your bankruptcy court filing with you page by page.
  • Once your documents are finalized and signed, we file your case with the court.

Your Bankruptcy Filing Date

  1. Automatic stay: After your case is filed, the Automatic Stay goes into effect. This is the court order telling your creditors to stop contacting you and / or trying to collect on their debts.  If any creditors contact you after your case is filed, notify your attorney.
  2. Unsecured debt payments: You will stop paying your unsecured creditors.
  3. Secured debt payments: Normally, you will continue paying your secured debts (examples: car loans and mortgages) if you want to keep the collateral (car or house.) You must pay each payment in full and on time during the time you are in bankruptcy.
  4. Ongoing Expenses: You will continue to pay your ongoing living expenses for things like rent, utilities, and food.
  5. “New” Debts: Keep in mind any debts that did not exist as of your bankruptcy filing date are unaffected by your bankruptcy. This means if you file bankruptcy on January 1 and don’t pay your rent on February 1, the unpaid rent is a new debt that will not be wiped out in your bankruptcy.
  6. Selling or Giving Away Assets: Don’t sell or give away anything you own while you are “in bankruptcy.”
  7. Unusual Expenses: Avoid unusual expenditures while in bankruptcy. An example would be an expensive vacation. If you have an emergency expense (broken hot water heater, emergency car repair) let your Attorney know about it.
  8. Applying for New Credit: Don’t apply for new credit during your bankruptcy case. If there is an emergency need for new credit, let your Attorney know.

3-5 Days After Your Filing Date

  1. Notices from the court: A few days after your case is filed, you will receive by mail several notices from the court. It is very important that you check your mail every day and immediately open any notices from the court.  You will continue to receive intermittent notices from the court throughout your case.
  2. Banking activities and bill paying: Your bank and / or creditors may cut off online statement access, stop sending you statements, and suspend your online bill-paying privileges while you are in bankruptcy. Be prepared to pay bills by check and U.S. mail.
  3. Continue sending checking and savings statements to your Attorney: Continue sending bank statements to your Attorney each time you receive a new statement. 

30-40 Days After Your Filing Date

  • Your Meeting of Creditors: About 30-40 days after your filing date, you and your attorney will meet with the Trustee handling your case. 
  • The trustee will ask you some standard questions that are asked in all cases.
  • The trustee will also ask you some questions more specific to your case.  Your attorney will have a pretty good idea of what these more specific questions will be.
  • Most questions are “yes” or “no” questions.

 50-60 Days After your Filing Date

  • If you have a car loan, you will decide how you want to treat the car loan in bankruptcy. **You must make all car loan payments on time and in full to be eligible to keep a car with a loan balance.**

About 75 Days After Your Meeting of Creditors

  • Your discharge will normally be entered 60-67 days after your trustee meeting, assuming there are no issues in your case.

One Week After Your Discharge Date- CASE CLOSING 

  • Shortly after your discharge order is entered, your case will be closed.
  • Please note:  case closing and discharge are two different events. Please wait until your case is closed to apply for new credit, sell or give away anything that belongs to you, or make any large purchases.  

After Case Closing: Resuming IRS or Student Loan Payment Plans

  • You may need to contact the IRS, other taxing authorities, and / or your student loan lender to resume payments on non-dischargeable obligations after your case is closed.