Chapter 7 Bankcruptcy Timeline
Most Chapter 7 bankruptcy cases are resolved quickly. In general, a case will be finished and the debtor will receive a discharge within 6 months of filing their case. There are several important dates that can have an effect on the debtor's right to file a case and receive relief. Following is a timeline of important dates in a typical Chapter 7 bankruptcy case.
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6 Years Before Your Bankruptcy
You will not qualify for a Chapter 7 discharge until eight years from the date you filed a prior Chapter 7 bankruptcy in which you received a discharge. If you filed a Chapter 13 or Chapter 12 bankruptcy and received a discharge within the previous 6 years, you may qualify for a Chapter 7 discharge, provided you paid at least 70 percent of your allowed unsecured claims, you showed good faith and put your best effort forward.
- Transferring, destroying or hiding any of your property in the year before you file for Chapter 7 may result in a denial of your petition and discharge, and can even result in the court allowing your creditors access to any of the property that you transferred.
- Paying off a debt to a creditor who is a close associate or a relative, also known as an "insider", at any time during the year before you file for bankruptcy will result in the payments being considered an unlawful preference; the court then has the right to recover all payments made and distribute the money to your creditors. .
- A prior bankruptcy case filed within one year of the time you file for Chapter 7 that has been dismissed will result in the termination of the Automatic Stay within 30 days, unless you can show that the Chapter 7 case was filed in good faith.
180 Days Before Your Bankruptcy
If you had a prior bankruptcy case that was dismissed because you did not comply with the court orders or you voluntarily requested a dismissal within 180 days of filing your bankruptcy, then you may not file your case until the 180-day period expires. You must also received individual or group briefing from an approved credit and nonprofit budget counseling agency within the 180-day period.
90 Days Before Your Bankruptcy
- To file a bankruptcy case in the current state in which you live, you must have resided in the state for at least 90 days. If you have not lived in the state for 90 days, you must file your case in the state where you lived, or the state where your principal assets have been for a majority of the previous 180 days.
- If you pay back any of your creditors, not just a relative or close business associate ("insider"), at any time during the 90-day period prior to the filing of your bankruptcy case, the payment is considered an unlawful preference, and gives the court the right to retrieve all payments made and distribute them to your other creditors.
- A cash advance in the amount of $750 or more within the 70-day period, as well as any new credit acquired of $500 or more for the purpose of "luxury goods or services" within the 90-day period before your bankruptcy is presumed to be a non-dischargeable debt.
- When your bankruptcy petition is filed with the appropriate bankruptcy court, your case is formally commenced. An Automatic Stay will be entered as soon as you file your petition, which will prohibit your creditors from taking any further collection or legal action against you. This will end all harassing letters and phone calls while your case is in progress.
- The court will then send a notice of your bankruptcy case to all of the creditors listed in your petition.
- The court will also appoint a bankruptcy trustee to oversee your case. A bankruptcy trustee is a federal employee assigned by the court to monitor your case and ensure that you are eligible for bankruptcy. They will review your petition to make sure it is complete and accurate, and then set up a meeting of your creditors.
15 Days After Your Case is Filed
Though your bankruptcy professional will most likely file these schedules with your petition, it is important to note that you have 15 days after you file your petition to file certain financial "schedules" with your court documents that list all of your assets, income, expenses, liabilities and a statement of your affairs. Speak with your bankruptcy professional if you have any questions about what should be included.
Approximately 15 Days After Your Case is Filed
The court will mail the Notice of Commencement of Case to you generally within 15 days. They will also mail this to the creditors listed in your petition. This Notice will contain the date set by the court for the meeting of your creditors, as well as the deadlines for your creditors to object to the case and file their claims against you.
Approximately 30 Days After Your Case is Filed
- You are required to file a Statement of Intention within 30 days after you file your case, or before the meeting of your creditors if that occurs first. You are advising the court in this statement about your intentions regarding your property that serves as collateral; whether you intend to keep it, or surrender it to your creditors.
- If you state that you intend to keep your property, you must indicate your intention to (A) reaffirm your debts and continue making all of the payments required to satisfy that debt; or (B) redeem the property by paying fair market value for it. This will result in you receiving a discharge of the debt owed over the fair market value of the property.
- When you file your Statement of Intention with the court, you must also serve a copy on your bankruptcy trustee and creditors.
45 days After Your Statement of Intention is Filed
Once your Statement of Intention has been filed, you have 45 days to surrender or keep your property as you indicated in the statement, and make all necessary payments.
Approximately 6 Weeks After Your Case is Filed
- About six weeks after your case is filed, the court will hold the Meeting of Your Creditors. You are required to provide a copy of your most recent tax return to the trustee or to any creditor who requests it at least seven days before this meeting.
- You are required to attend the meeting, and must testify under oath as to the accuracy of the statements made in your petition. This meeting will be presided over by your court-appointed bankruptcy trustee. This is a very informal meeting; there will not be a judge present, and most of your creditors will not be in attendance. In most cases, the meeting lasts no more than ten minutes. However, if you do not attend the meeting, your case will be dismissed.
- You must file a statement that contains a certificate from your professional stating that you received an explanation of the various chapters available to you under the bankruptcy code, proof of any payments you have received from an employer within 60 days of filing your petition, an itemized statement of your monthly income, and an estimate of any increase in income or expenses that you expect over the next 12 months. This must be filed within 45 days after you file your petition for bankruptcy.
30 Days After The Meeting of Your Creditors
Any objections from your creditors, or your court-appointed bankruptcy trustee must be filed within 30 days after the conclusion of the Meeting of Your Creditors.
60 Days After The Meeting of Your Creditors - Any objections to the discharge of any of your debts listed in your petition and schedules must be filed by your creditors or trustee within 60 days after the date first set for the Meeting of Your Creditors.
- Your creditors may object to the discharge of any debts obtained as a result of misconduct such as: fraud, embezzlement or larceny, willful or malicious injuries you have caused others, or a divorce or separation (not including debts for child or spousal support, which are considered non-dischargeable debts by law).
- Your creditors may also object to the discharge of all of your debts if you have: willfully concealed or destroyed any property or financial records, made false statements, withheld information, failed to explain losses, failed to respond to material questions, or had a discharge in a prior case filed within the last 6 years.
- If your trustee finds within this time period that granting relief to you would be an abuse of the provisions of Chapter 7, he must move to dismiss your case. As soon as the 60-day time period for filing objections to the discharge of your debts or your trustee moving to have your case dismissed has expired, you will receive your Chapter 7 discharge 60 days after the Meeting of Your Creditors. However, if you do not turn over nonexempt property or if you commit other bankruptcy violations, your court-appointed trustee can move to set aside your discharge.
There is one final step you must complete, as required by The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 - the financial education requirement. You are required to complete a course regarding personal financial management through an approved financial management class. Your bankruptcy professional can refer you to an appropriate agency.
90 Days After The Meeting of Your Creditors
- With the exception of government entities, all of your creditors must file their proofs of claim to the court regarding the specific amounts you owe within 90 days after the first date set for your Meeting for Your Creditors, if they wish to share in the payments from your case pending there are any assets that can be liquidated.
3 Years From the Date of Your First Repayment
180 days after the filing of your case, Government entities that have claims against you (such as the IRS) must submit their proofs of claim.
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If you are still not sure if bankruptcy is right for you, or you still have questions you want answered before taking action, you can review our education resources found throughout our website. You can find out whether bankruptcy is right for you and what you can expect in your life after bankruptcy, and you can learn more about Chapter 7 or Chapter 13. Whatever you choose to do, DO NOT DELAY; the only thing you have to lose is your debts!