One of the most common questions is I get about Chapter 7 bankruptcy is how long the process takes. In my experience, clients spend more time worrying about the decision to file bankruptcy and gathering the necessary paperwork than the time actually spent in bankruptcy. Once a Chapter 7 bankruptcy case is filed, it moves much more quickly than you may think.
The Bankruptcy Court will schedule a Meeting of Creditors that must be held within 20 to 40 days after the case is filed. At the Meeting of Creditors, the Chapter 7 trustee will ask you questions under oath and conduct an investigation into your financial affairs. In about 97% of the Chapter 7 bankruptcy cases that I file, the trustee determines that the debtor’s assets are exempt and cannot be used to pay the creditors. The trustee will usually file a “no asset report” or a “report of no distribution” and the file will be closed shortly after the court enters the discharge order.
Creditors have 60 days from the Meeting of Creditors to object to the debtor receiving a discharge. In a “no asset case”, the Bankruptcy Court in San Diego where I practice will usually enter the discharge and close the case within a week of the expiration for creditor objections. Courts in other parts of the country may take a little longer, but nearly all of my Chapter 7 bankruptcy cases are over in 90 to 120 days.
Once the trustee concludes the Meeting of Creditors and you have completed the other steps outlined above, you are on cruise control and just waiting for discharge.
Things That Could Make the Case Last Longer
If you are reaffirming a car loan or filing a motion for redemption of a vehicle, those must be filed and approved before the court will grant your discharge. You should also take the required post-bankruptcy course in financial management and get the certificate to your attorney as soon as possible. Failure to do so could result in the court closing your case without a discharge.
If the trustee locates assets that will be sold for the benefit of your creditors, the case may remain open for several more months until the creditors have been paid. However, you will still receive your discharge of your debts. The discharge releases you from most of your debts, allowing you to focus on moving forward with life with the emotional debris of excessive debt removed from your path.
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