Chapter 7 Bankruptcy Timeline
The typical Chapter 7 bankruptcy is approximately a 4-month process. While a Chapter 7 can be much longer than 4 months where litigation develops or where the Chapter 7 Trustee is successfully liquidating personal assets, the general timeline is as follows:
1. Pre-bankruptcy planning and petition drafting with The Hilla Law Firm
We will work with you to help you assemble the large amount of information and documentation required for a bankruptcy filing, draft your petition, and get it ready for filing. Occasionally, this pre-filing period requires a voluntary waiting period in order to allow certain timeframes to elapse in order to protect your assets and discharge after filing. Otherwise, as soon as you assemble the documentation and take the required online pre-filing credit counseling course, we can get you filed very quickly.
2. Filing of the petition
The filing of the petition initiates the formal Chapter 7 process. It is from this point in the process that the 4-month approximate timeline runs. Upon filing, the automatic stay against collections is enforced under Federal Law, and you begin enjoying the protections of the bankruptcy process immediately
3. 341 Meeting of Creditors
The 341 Meeting of Creditors is the sole hearing you will have to attend in a typical Chapter 7 (though additional hearings and court-dates can be required in complex cases). The 341 Meeting is a sit-down with the Chapter 7 Trustee and any creditors who care to attend (few usually do) in which the Trustee asks you various questions on the record, under oath. The 341 Meeting occurs 20-40 days after the date of filing and typically takes no more than 5-10 minutes. Attorney John Hilla prides himself on personally attending each and every of his clients’ 341 Meetings and never uses “appearance attorneys” whom you have never met and who do not know your case and your story.
Although you technically have more time to get it done, we prefer our clients complete the 2nd required online credit counseling course by the time of the 341 Meeting, so that you need not keep more than 1 deadline date in mind. Failure to complete this course by a certain deadline will result in the court’s dismissal of your bankruptcy case.
So long as no litigation develops in your Chapter 7 or time-consuming liquidation of assets by the Chapter 7 Trustee, you will receive your discharge of debts approximately 60 days from the date that the 341 Meeting is formally “concluded” by the Trustee (this can be later than the date on which the Meeting is actually held, if the Trustee requires extra documentation to be submitted at the 341 or in other circumstances). This 60-day waiting period is a period of time that the Bankruptcy Code provides the Trustee and Creditors to consider whether to contest your discharge.
In a typical Chapter 7, however, not much happens in this period of time. We call it the “No News Is Good News Period.” If you aren’t hearing anything from a creditor, from the Court, or from us, everything is proceeding exactly as it should be.
5. Case Closure
In a typical Chapter 7, the case is closed by the court about the same time, give or take a week or two, that the discharge is issued. However, this is not always the case. Where litigation is ongoing or where the Trustee is liquidating assets and distributing the proceeds to creditors, the case may remain administratively open by the court and the Trustee until this is accomplished, sometimes as long as 2-3 years after discharge.
Chapter 13 Bankruptcy Timeline
A Chapter 13 bankruptcy is, essentially, a 2-5-year long payment plan in which you repay some of what you owe to your creditors and discharge the unpaid balance. It is by nature a much longer process than a Chapter 7 bankruptcy.
The initial part of the Chapter 13 timeline mirrors the Chapter 7 timeline:
1. Pre-Bankruptcy Planning and Petition Preparation
In a Chapter 13 bankruptcy, this can additionally involve the need for additional information-gathering steps: real estate appraisal, Qualified Written Request letters to mortgage creditors, and taxing authority communication.
2. Filing of the Petition
In a Chapter 13 bankruptcy, we also file lien strip adversary proceedings (lawsuits) to strip off and discharge second mortgages and home equity lines of credit and the orders with the court to deduct your Chapter 13 plan payments from your wages or via ACH debit from your bank account at this time as well.
3. First Payment Due
Your first Plan payment is due to the Chapter 13 Trustee no later than 30 days from the date of filing. By the time your second payment is due, it should be deducted automatically from your wages or bank account, but you will need to get your first payment to the Trustee the old-fashioned way: in the mail by cashier’s check.
4. 341 Meeting of Creditors
Much the same as a Chapter 7 341 Meeting of Creditors, the Chapter 13 341 Meeting of Creditors is an informal administrative hearing with the Trustee or a member of his or her staff, in which you are asked questions about your income, your expenses, your assets, your debts—anything the Trustee needs more information regarding—on the record, under oath. Creditors actually appear for the Chapter 13 341 Meeting even less often than for the Chapter 7 341 Meetings.
Depending upon which Trustee is assigned to your case, you may have to attend a 45-minute orientation prior to your 341 Meeting. As with the Chapter 7 341 Meeting, we prefer our clients complete the second online credit counseling course that is required prior to this hearing.
5. The Trustee Issues His or Her Objections to the Confirmation of Your Plan
Nearly always in the Eastern District of Michigan, Detroit Division, a few weeks after the 341 Meeting, the Chapter 13 Trustee will issue some or many “objections” to the confirmation of your Chapter 13 Plan. In other areas of Michigan, the Trustees are less likely to do this as a matter of course. However, in Detroit, it is rare that the Chapter 13 Trustees do not object to some aspect or aspects of your case, and, when they do, it requires experienced representation to deal with them.
The Hilla Law Firm, PLLC is experienced in working with the Chapter 13 Trustees to resolve objections. While other Detroit-area bankruptcy law firms file dozens of cases each month assembly-line style and therefore have limited ability to give your case the personal attention it requires to quickly resolve these objections, The Hilla Law Firm is a small, focused practice with an emphasis on customer service. When the Trustees object to our Chapter 13 Plans, we move fast to resolve them to increase the odds that you will not have to attend the further Confirmation Hearing below.
6. Confirmation Hearing
If the Trustee’s or creditors’ objections to your Chapter 13 Plan are not fully resolved by the scheduled date of your second and usually final Chapter 13 hearing, you will next need to attend a Confirmation Hearing. This hearing is an opportunity for us to resolve any remaining objections or issues face-to-face with the Trustee and/or creditors. There is not typically much for you to do at these hearings: you are present to approve or disapprove any steps required to resolve outstanding issues. As with any area of law, it is the client’s place to approve or disapprove settlements.
The Hilla Law Firm has an established record of resolving Trustee’s issues in advance so that none of us need to attend a Confirmation Hearing. However, you should plan on attending on the scheduled date until otherwise notified by us.
Whether you need to attend the hearing or not, the Confirmation Hearing date is generally the date upon which your Chapter 13 case is confirmed, or approved, by the Court.
After Confirmation, you are on Chapter 13 “auto-pilot.” So long as you make your payments on time each month, you will proceed to discharge, just as in the Chapter 7, above. However, if your income decreases or your expenses increase or something else occurs to disrupt your ability to make the Plan payment agreed upon and enforced by court order at your case Confirmation, we may need to modify your Plan to accommodate your changed circumstances. This period will last 2.5-4.5 years long, depending upon the length of your Plan and the number of months necessary to get the Plan Confirmed.
Discharge occurs after you have made all required Plan payments in your Chapter 13 Plan and paid the amounts required to be paid to certain types of creditors over that length of time.
The Hilla Law Firm, PLLC is experienced with both Chapter 7 bankruptcy and Chapter 13 bankruptcy and represents individual consumers throughout lower Michigan. If you are considering filing for bankruptcy, please contact us to schedule an initial consultation.