Summary of Chapter 7 Timeline
Prior to filing
- Meet with attorney and sign retainer
- Debtor collects documents and provides to attorney
- Debtor completes online class in consumer credit counseling
- Debtor reviews and signs all documents to be filed with bankruptcy court, the “Petition”
- 341(a) meeting of creditors date/time assigned to debtor
- Bankruptcy Judge and panel trustee assigned to debtor’s case
- Debtor completes online debtor education class
- Attend 341(a) meeting with attorney approximately 45 days after filing
- Wait 60 days from date of initial 341(a) meeting for passing of creditors’ deadline to object
- Discharge entered and case closed
Prior to Filing for Chapter 7 Bankruptcy
The amount of time necessary prior to filing a Chapter 7 depends largely on the debtor and whether or not any pre-petition or pre-filing planning tools need to be employed. Many debtors don’t need any pre-petition planning because they easily qualify based on income and have no assets subject to liquidation. However, certain documents are always needed from a debtor in order to draft the case and it is up to the client, or debtor, to gather these documents and provide them to the attorney. Some debtors make gathering these documents a priority and have returned them to the attorney within a few days. Other debtors may take up to a month or more to gather their documents to return to their attorney. The attorney’s primary concern is probably not the shortness or length of time which a client takes to return the requested documentation; rather, the attorney is more concerned that the documents are complete as requested and are current at the time they are returned.
In many situations, a client is facing foreclosure, wage garnishment, or a frozen bank account that is soon to be levied and needs to file a case immediately. An ”emergency or skeleton petition” can be filed within an hour and will work to stop the foreclosure sale or wage garnishment from occurring. Normally, a debtor must complete a credit counseling class prior to even the emergency filing. However, this credit counseling can be completed online in approximately 30 minutes. When an emergency petition is filed, the debtor and their attorney then have 14 days to complete the remainder of the petition. It is vital that the client immediately gather necessary documents requested by his or her attorney so that the rest of the case can be drafted and filed. If the remaining schedules, statement of financial affairs, etc. are not filed within 14 days from the date the emergency petition is filed, the case will be dismissed and the protections of the automatic stay will disappear.
In either a standard Chapter 7 filing or an emergency Chapter 7 filing, the debtor will need to meet the their attorney (usually on at least two occasions in a normal filing) to sign a retainer agreement and to review and sign their petition prior to filing. Often times, more meetings are necessary between attorney and client in order to get the case ready for filing. As mentioned in the preceding paragraph, all debtors must complete a class in credit counseling prior to the filing of their case. All of our clients take this class online and it usually takes approximately 30 minutes to complete. We pay for this class for all of our clients.
After Filing for Chapter 7 Bankruptcy
After a Chapter 7 is filed, things move pretty quickly. All creditor calls and correspondence should stop within 5 business days of the filing because the bankruptcy court issues physical notices through the mail to all creditors listed in the debtor’s case. Prior to filing, most bankruptcy attorneys will offer to handle any creditors of their client. This can many times be taken care of by the debtor simply telling a creditor or debt collector that they have hired an attorney (and providing the attorney’s name and phone number). On occasion, the debtor’s attorney may have to send cease and desist correspondence to a creditor in order to stop their contact of the client.
As soon as the case is filed, a date and time for the debtor’s 341(a) meeting of creditors is assigned. It is typically 45 days from the date the case is filed. Also, a panel trustee and Bankruptcy Judge are assigned automatically upon filing of the case. Neither the debtor nor the bankruptcy attorney has any control over the time/date of the 341 or the assignment of the Judge/Trustee.
The only thing the debtor needs to do in between the date of filing and the 341 meeting (at least with our firm) is complete the required post-filing debtor education class. All of our clients take this course online. It takes approximately two hours to complete and is not complicated. Like the pre-filing class in credit counseling, we pay for this second class in debtor education or personal financial management for all of our clients.
After the 341(a) meeting of creditors occurs (about 45 days post filing), in most cases, there is absolutely nothing that needs to be done by the debtor. The debtor’s creditors have 60 days from the date of that initial 341 meeting to object to discharge. Essentially, the debtor just waits 60 days from the date of the 341 and shortly thereafter, he or she receives his discharge order and is no longer personally liable for pre-filling dischargeable debts.