What is the bankruptcy process like?

A typical Chapter 7 bankruptcy takes about six months from start to finish.  Prior to filing, a mandatory pre-bankruptcy credit counseling course must be taken. 

It is a 45-minute, online course and costs just five dollars.  Once Meyer Law strategically plans and files your case, you will receive a questionnaire and request for documents from the Trustee assigned to your case.  The Trustee’s duties include verifying that you qualify, examining your assets, and looking into recent transactions, such as the transfer of assets out of your name or the recent repayment of debt to creditors, especially friends or family members.

There are three additional steps that must take place after filing.  First, we will decide which debts, if any, to reaffirm.  Reaffirmation involves taking certain debts like a mortgage or car loan that you plan on keeping out of the bankruptcy.  The second step involves your completion of a post-bankruptcy education course which can also be taken online.   Finally, we will both attend (client and attorney) a short meeting with the Trustee about one month after filing.  This is usually the only meeting required, and the purpose is for the Trustee to ask any questions he has about your case.

Contrary to the title “Meeting of Creditors,” it is rare for a creditor to actually show up at the meeting.  From the date of the Trustee meeting, creditors have 60 days to file an objection.  A common reason for a creditor to file an objection is if you have acquired recent debt. After the 60 days have expired, you will receive your discharge.  If there are no assets for the Trustee to administer, your case closes shortly after the discharge.  Otherwise, the Trustee will administer assets and then close the case.  The majority of Chapter 7s are no-asset cases.

The Chapter 13 process, known as a reorganization, takes three to five years.  The process is similar to Chapter 7, but one difference is the Chapter 13 Trustee takes on a broader role than a Trustee in a Chapter 7.  The monthly payments in a Chapter 13 run through the Trustee who acts as your personal accountant during the process.  The Chapter 13 Trustee also is responsible for approving the Chapter 13 Plan, making sure it is feasible, and that the appropriate amount is getting paid based on income and the types of debt.