Bankruptcy: A Timeline

A Bankruptcy Timeline: What to Expect

Filing for bankruptcy can be a journey into the unknown so being aware of the timelines can help reduce your stress level. Many people ask themselves “how long does it take to file for bankruptcy?” The timelines will vary depending upon whether you file for chapter 7 or chapter 13 bankruptcy. Read our article below to get some expectations of filing for bankruptcy.

Chapter 7 Bankruptcy: A Five Month Timeline

Step 1: Taking a Credit Counseling Course

In order to qualify to file for chapter 7 bankruptcy, an individual must file take a credit counseling class and get a credit counseling certificate. The credit counseling certificate is valid for up to 180 days prior to filing a bankruptcy petition. If you file a bankruptcy petition and do not have a certificate, your case will be dismissed. If you have a certificate which is more than 180 days old and you file for bankruptcy, your petition will also be dismissed.

When your attorney file a bankruptcy petition, they can either file an emergency petition or a complete petition. In certain situations such as on the eve of a trial or bank garnishment, you may want to file an emergency petition. If you do file an emergency chapter 7 petition, then your attorney has approximately 28 days to finalize the petition.

Step 2: Creditor Meetings

Once a petition is finalized, the Clerk will schedule a meeting of creditors which will take place in approximately 30-60 days. A chapter 7 trustee will conduct the meeting of creditors to review your petition to make sure that everything is true and accurate. Creditors may also appear, although they rarely do.

Step 3: Debt Objections

After a meeting of creditors, any party has 60 days to object to their debt being discharged or to object to a debtor getting a discharge. Also, a debtor has 60 days to take a debtor education class and obtain a certificate of debtor education which must be filed with the court. If a debtor does not take the class, then the debtor will not receive a discharge, even though they may be otherwise entitled to receive one. If no one objects to your discharge and your file your debtor education certificate, you should get a discharge about 90 days after your meeting of creditors. From start to finish, a person is looking at about a 5 month time frame in chapter 7.

Chapter 13 Bankruptcy: A Pathway to Financial Freedom

Step 1: Taking a Credit Counseling Course

In chapter 13 bankruptcy, as in chapter 7, an individual must take a credit counseling class and obtain a certificate of credit counseling in order to qualify to file a chapter 13 petition.

It is probably more common to file emergency petitions in chapter 13 in order to stop sheriff sales. If you do file for chapter 13, your attorney will have approximately 24 days to complete your petition.

Step 2: Creditor Meetings

After your petition is complete, the Clerk will schedule your meeting of creditors within about 30-60 days. The chapter 13 meeting of creditors is different than the chapter 7 meeting of creditors because at the chapter 13 meeting, the debtor is submitting a chapter 13 repayment plan for the chapter 13 trustee to consider. The repayment plan will typically be for a 3 to 5 year period. After the meeting of creditors, the chapter 13 trustee will schedule a conciliation conference for your attorney to attend after the time for creditors to file claims expires. This is usually several months after the meeting of creditors and the debtor is not required to attend the conciliation conference.

Step 3: Create & Start a Plan

If a chapter 13 plan is approved at the conciliation conference, then there are two things that a debtor has to do. First, a debtor has to make all of their payments to the chapter 13 trustee as provided for in their approved plan. Second, the debtor has to take the debtor education class and file their debtor education certificate prior to the date that their last payment is due under their plan.

In both chapter 7 and chapter 13, debtors are required to take both the credit counseling class and the debtor education class. Debtors in both chapters will also have to attend a meeting of creditors about 30-60 days after their petition is completed. The main difference with timelines in chapter 7 and chapter 13 is that a chapter 7 is usually over in about 5 months and a chapter 13 case can take up to 5 years to complete.

There are different reasons to file for chapter 7 or chapter 13 and Gross & Patterson, LLC can help you navigate the ins and outs of both chapters.