Understanding the process of a Chapter 7 Bankruptcy can help to relieve the anxiety of your situation. Many times the stress of a current financial hardship can cause an individual to become overwhelmed to the point of not knowing what the next step should be, and the thought of bankruptcy can be daunting due to so many unknowns. At Lehn Law, P.A. we want to help you. We believe that through education comes understanding, through understanding comes action and with action...RESULTS! Use this timeline as an educational tool to give you the knowledge and power to move forward and get the results you want!
Bankruptcy Timeline - Chapter 7
Client pays retainer in full, completes credit counseling, and provides all documentation and “homework”. Upon receipt of all of the above, we will prepare your bankruptcy petition.
A Final Review, of approximately 1 hour in length, is scheduled at which time you will review your petition with Joseph Lehn. At this appointment both you and your attorney will sign and date the petition.
Your case will be filed electronically with the Bankruptcy Court. We receive a case number immediately.
Within a few days after filing:
Your case is assigned a Judge and Trustee.
A meeting of creditors is scheduled. You will be asked to provide additional information to your Trustee (ie. recent paystubs, bank statements, etc).
All of the creditors listed on your petition will receive a Notice from the Bankruptcy Court notifying them of your bankruptcy petition. It may take a few weeks for creditor calls and mailing to cease. If after 30 days of filing, you continue to receive calls or mail from a creditor, please advise this office. You will need to provide the name and address of that creditor, so that we may send a letter informing the creditor that they are in violation of the law by continuing to contact you.
If there is a secured creditor you wish to keep paying (ie. house, vehicle, furniture or other secured loan) please be reminded, that during the course of your bankruptcy, for the same reason that the creditors are barred from contacting you, automatic withdrawals you have set up may be stopped and you may no longer receive monthly statements. If you wish to retain the collateral and not get behind in payments please continue to make monthly payment to your secured creditors.
The meeting of creditors will take place approximately 30 days after the filing of your bankruptcy petition. At this meeting, which lasts from 5 - 10 minutes, you will meet your Trustee. Your attorney will also be present at this meeting.
If you discover there was a creditor that you failed to list on your petition, please let us know as soon as possible. Additional creditors can be added after filing, if the debt was incurred prior to the filing of the petition. There is a cost of $100 and a $26 filing fee to file an Amendment adding creditor(s).
If you are surrendering real property and/or vehicles in your bankruptcy, the creditor will file a Motion for Relief from Stay requesting the Bankruptcy Court for permission to proceed in taking possession of the property. No response is needed on your part as you are surrendering the property.
You will need to complete a second credit counseling course after filing. It is sometimes called a course in Debtor Education or Personal Financial Management. This certificate must be filed before a discharge can be entered in your case.
A Discharge is entered typically about 4 months after the date your case was filed. A bankruptcy discharge releases you, the debtor, from personal liability for certain specified types of debts. In other words, you are no longer legally required to pay any debts that are discharged. The discharge is a permanent order prohibiting your creditors from taking any form of collection action on discharged debts, including legal action and communications with you.
If your case was a no asset case, a Final Decree closing the case will be filed at the same time as the Discharge.
If your case was an asset case (meaning you will be paying to “buy back” your assets that are not exempt from the Trustee), the Trustee may decide to have your personal property appraised. Based on either the values on the petition and/or the appraisal report, an agreement wherein you surrender property or buy it back by making monthly payments or a lump sum payment will be reached. Please note, you will know prior to filing if your case is an asset or no asset case.
The Trustee will auction surrendered property. The money collected from the auction and/or from your payment(s) will be distributed to creditors that file a Proof of Claim. You will continue to receive a copy of the documents being filed by the Trustee and the Creditors.
When the money has been distributed, the Trustee will file a Final Report and Accounting. Shortly thereafter a Final Decree will be filed, thereby closing your case.
