An overview of the chapter 7 bankruptcy process

Here at Shenwick & Associates, the end of the holidays and the start of the new year brings new inquiries from potential clients who have resolved to tackle their debt in 2019.  This month, we’re going to discuss the timeline of the chapter 7 bankruptcy process (we also handle cases involving other chapters of the Bankruptcy Code, such as chapter 11 and chapter 13).

When a potential client contacts us, we schedule an hour-long meeting and ask for the following documents to be brought to the meeting: (1) a list of assets; (2) a list of liabilities; and (3) an after–tax monthly budget.  At the meeting, we review the documents and discuss their finances, debtor and creditor law and pre–bankruptcy planning.  Our goal in a chapter 7 filing is to discharge as much debt as possible (giving the client a “fresh start”) and exempting as many assets as possible from the bankruptcy estate that’s created when their petition is filed.

When the client retains us, we send him or her a link to enter the financial data we need to prepare the bankruptcy petition and information about the mandatory credit counseling course.  We draft the petition, review and review it with the client, and finally electronically file the petition and pay the filing fee.

Shortly after the petition is filed, we receive notice of the § 341 meeting of creditors.  Jim attends the meeting with the client (who must bring an original Social Security card and a current photo ID).  Before the meeting, we prepare the client on how to dress and questions that he or she can expect from the chapter 7 bankruptcy trustee. 

Creditors may also attend the meeting and have 60 days from the date of the meeting to object to a discharge of their claim in bankruptcy or the debtor’s discharge.  Our goal is to have the chapter 7 trustee close the case at the end of the meeting, which happens in about 90% of our cases.  Within 60 days after the meeting, the debtor needs to take a post–bankruptcy debtor education course.

The process usually takes about two to six months from start to finish.  To discuss discharging your debts in 2019, please contact Jim Shenwick.