How Long Does Bankruptcy Chapter 7 Take?

You may have heard that Chapter 7 is a relatively quick process. But how long does bankruptcy Chapter 7 take from filing to discharge?

Typically, you can expect your case to last anywhere between four to six months. But the timeline may vary depending on the specifics of your case. An experienced Dallas bankruptcy attorney can help guide you through the process and help you avoid potential pitfalls that could delay your case.

What Are the Steps in the Chapter 7 Process?

The timeline for your Chapter 7 bankruptcy will look something like this:

Preparing Your Case

Assuming that you’re eligible for Chapter 7, you will need to consider which debts can be eliminated and which debts will have to be reaffirmed — and which assets will be subject to liquidation and which assets you can protect under Texas’ bankruptcy laws.

Filing Your Petition

You will file your petition with the court. Once you file, you have up to 14 days to submit supporting documentation, including forms related to your debts, assets, and property transactions going as far back as ten years. It’s a tedious and complicated process, but this information will provide the backbone of your bankruptcy. Any debts you want discharged will need to be listed.

Informing the Court What You Will Do With Unsecured Debts

After you file for bankruptcy, you will have 30 days to decide what you want to do with your secured debts. These can include cars and your mortgage. You can surrender the property, and discharge any remaining delinquency or you can reaffirm the debt based on the original terms or negotiate revised terms.

Attending the Meeting of Creditors

Four to six weeks after you’ve filed for bankruptcy, you will be required to attend the 341 Meeting of Creditors. This process is usually not quite as daunting as it sounds. Creditors generally do not show up for the meeting in a typical Chapter 7 case unless they have good cause. The bankruptcy trustee who presides over your bankruptcy case will ask you a series of basic questions relating to the information you provided on your bankruptcy forms. These questions are simply to ensure that you have been honest and thorough in reporting your assets and income.

After the meeting of creditors, creditors may be able to raise objections to your exemptions, but only have 30 days after the meeting of creditors to do so. After 30 days have elapsed, they’ve lost their chance. Creditors also have 60 days to object to the discharge of specific debts. Creditors have 90 days to file proof of claims, documents proving that you owe the creditor money.

Completing a Financial Management Course

Within 60 days of the meeting of creditors, you are required to take and complete a financial management course. This is different from the credit counseling course you took before filing for bankruptcy.

Closing Your Case

Around two months after the meeting of creditors, you will receive your bankruptcy discharge. The discharge formally acknowledges that you no longer owe the debts. While the discharge is the main point of bankruptcy, your bankruptcy may remain open for another two to four months.

What Factors Could Delay Your Bankruptcy Case?

The process described above is when everything goes smoothly and there are no creditor objections. However, some bankruptcies can get complicated. The following are things that could delay your case:

Trustee Must Liquidate Some Assets

If you have any assets that you could not be exempted, selling off the assets will delay your bankruptcy. The trustee will need to determine the value of the asset and then secure a fair market price for it. The money from the transaction will be turned over to your creditors.

Creditor or Trustee Objects

Generally speaking, when a creditor objects to a discharge, they are alleging fraud against the person filing for bankruptcy.

If a creditor objects to your bankruptcy exemptions, they have 30 days after your meeting of creditors to express their objections to the bankruptcy court.

If a creditor objects to the discharge of certain debts, they have 60 days after your meeting of creditors to file the objection with the court.

The objecting creditor has 90 days after your meeting of credit to file their claims with the court, providing evidence proving that you owe them money.

Trustee Objects

If there are any recent transactions, the trustee will look at those under a microscope since some individuals believe they can transfer valuable assets to family or friends as a way of protecting them. But this is fraud, and if the bankruptcy trustee or creditor has reason to believe you are acting in bad faith, it will hold up the bankruptcy process.

Trustee Sells Your Assets

If the trustee identifies assets that could be sold in your case, it will take time to value the assets, acquire them from you, and sell them.