Bankruptcy Discussion

A bankruptcy case filed under Chapter 7 of the Bankruptcy Code is the type of case in which a debtor seeks to discharge all of his or her unsecured liabilities (credit cards, personal loans, medical bills, judgments that are not liens on an asset, even personal liability on secured loans) without paying a percentage of those debts through a multi-year plan. Typically, one will file a Chapter 7 petition with the bankruptcy court (e.g., April 20th) and then meet with the Chapter 7 trustee about thirty days later (e.g., May 20th). At the meeting, the Chapter 7 trustee gets to ask you any and all questions about your financial situation, both present and past. The meeting with the trustee also is a forum in which the creditors are able to attend and ask you questions.

If all goes well at the meeting with the trustee . . . well, what does that mean? From your standpoint, “if all goes well” means if the trustee confirms that you have no assets that the trustee can sell to pay some of your debt or if the trustee finds that you do not have disposable income sufficient to convert your case into one under chapter 13. So . . . , if all goes well at the meeting with the trustee, then you must wait about sixty more days (e.g., to July 20th) for the period to run in which interested parties are able to object to the dischargeability of a particular debt or to the discharge of your debts globally. If that additional sixty or so days runs without an extension or the filing of a lawsuit by the trustee or a creditor, then the court will usually issue your discharge order and then administratively close the case shortly thereafter (e.g., July 21st to August 20th).

Therefore, to sum up, an uncontested Chapter 7 bankruptcy case will usually run from 90 to 120 days, from the filing of the petition to the close of the case. The momentous dates are the petition filing date, then the meeting with the trustee about 30 days later, then an additional 60-day period during which the trustee or creditors can object, then the discharge order and close of case. Be warned, though, that a Chapter 7 case can run many more months if the trustee must dispose of an asset to pay some of your debt.