There are some key events in a chapter 7 bankruptcy case. This article details some of the most important bankruptcy events that occur, in chronological order.
1. Meet with a Bankruptcy Attorney to determine if bankruptcy is an appropriate option: I offer free in-office (and telephone, when needed) bankruptcy consultations. I provide an analysis of a consumer’s debts, assets, and potential bankruptcy issues. If chapter 7 is appropriate for the consumer, I have him or her gather the required documents, and take a credit counseling class (online, a requirement of the bankruptcy).
2. Attorney follow up meeting: I meet with my client, and the client delivers the requested documents and attorney fee. The client can elect to pay the court filing fee ($306) directly or on installment to the court after we file. We set a date to file, and with documents in hand, I start preparing the bankruptcy petition.
3. Meeting to file bankruptcy: I meet my client for about 2 hours or so on the day we file to review thoroughly the contents of his or her bankruptcy petition, and make certain everything is complete and accurate. After my client signs the bankruptcy petition, we file the petition with the U.S. Bankruptcy Court electronically. Clients are often surprised that the bankruptcy petition can be filed any day of the week, and at any hour, because the filing is electronic. Once we file the bankruptcy, we immediately receive a hearing date before a trustee, which is about 30 days out.
4. Hearing before the Bankruptcy Trustee: To this meeting, a client must bring his or her license and social security card for ID. Also, a client will need to bring the bank statement for the month in which he or she filed bankruptcy (to show how much was in the bank account on the day of filing) and the paystub received right after he or she filed bankruptcy. I will call a client several days before the hearing as a courtesy reminder that the hearing will take place. The hearing is only about 5-10 minutes long, and the trustee asks various questions, which can be found at: SAMPLE QUESTIONS THE TRUSTEE ASKS.
5. Waiting for Bankruptcy Discharge: After the hearing, a client will need to take a second class, or Financial Education Course (clients can actually take this before the hearing if they wish). Approximately 60 days after the hearing date, the client will receive his or her bankruptcy discharge order via US Mail. During this period, certain creditors have the opportunity to object to their claim being discharged in bankruptcy; if they do not object within a certain time frame, they are barred from any further action.
6. Discharge Order and Beyond: Once a client receives his or her discharge order, the bankruptcy case is also usually closed. In some cases, the case may remain open to administer an asset, but a client will still receive his or her discharge despite the case remaining open. After discharge, a client will have a fresh financial start and can start planning for life after bankruptcy.
If you are interested in bankruptcy, please feel free to contact me to set up a free bankruptcy consultation.