What Is the Timeline for Chapter 7 Bankruptcy

When you are no longer able to pay off your debts, one of your last debt relief options is most likely to be filing for bankruptcy. By filing for bankruptcy, you can legally state that you cannot repay your debts any more.

In bankruptcy, you have 2 choice; that is, either declaring Chapter 7 bankruptcy or Chapter 13 bankruptcy, depending on the amount of the debts you owe and the income you make.

Out of these 2 bankruptcies, Chapter 7 bankruptcy makes the most sense. However, you should consult with your bankruptcy attorney, carefully consider both options and do what is best for your financial situation.

In the event that you do choose Chapter 7 bankruptcy, here is the timeline for Chapter 7:

First of all, your declaration of bankruptcy on the record starts when you file the docs and sign the paperwork with your local bankruptcy court. In some of the states, you need to complete a bankruptcy counseling course to be sure that bankruptcy is the proper debt relief option for you.

Most of time, this kind of course can be done in less than 6 months prior to actually filing for bankruptcy. Upon filing for bankruptcy, your wages will not be garnished and your creditors cannot proceed with legal actions against you or even call you about your debts. The court will make an official contact with your creditors regarding this matter.

After you submit the proper forms to the court, you need to attend 341 meeting, which is a meeting with your creditors. A lot of times the creditors do not come to 341 meeting, but you must attend. A bankruptcy trustee will be assigned and be in charge of your case.

The bankruptcy 341 meeting normally lasts about 10 minutes, if your creditors do not show up. In case you are afraid that your creditors will show up and challenge you about your debts, have your bankruptcy attorney come with you to the 341 meeting.

After the meeting, your trustee will sell any of your nonexempt possessions that are listed on the file. Just for your info that most of your possessions can be sold when you file for bankruptcy and they will be sold very fast. Your creditors have up to 90 days to file claims.

After the 90-day period is over or after your creditors have filed their claims, whichever comes first, all of your debts will be discharged, except for certain debts, such as child support payments, alimony obligations, taxes and student loans.

Filing for bankruptcy 7 is the least desirable debt relief option. If you can, look for other debt relief options, like debt settlement programs, to avoid bankruptcy.