The bankruptcy process is typically the same whether you file a Chapter 7 or Chapter 13 except for when a discharge is granted. If you file a Chapter 7 petition, the process could take approximately 6 months or several years if you file a Chapter 13 petition. The bankruptcy process is as follows:
Attend a free, no obligation attorney consultation. At this consultation you will meet with an attorney who will counsel you on your financial situation. The attorney will discuss if a Chapter 7 or 13 is the best option for you, if you should wait to file, if you should not file at all or if additional options are available.
A petition filing starts the Bankruptcy. Before the petition is filed, several items need to be completed and accomplished by the client. These items include: executing a retainer agreement between attorney and client, completing the first counseling session, completing the Client Intake Form that is provided by the attorney, providing all applicable documents that are shown on the Client Document Checklist Form that is provided by the attorney (which includes pay stubs for the 60 days prior to filing or a no pay stub affidavit), and reviewing and signing the petition by the client. The petition is filed with the Bankruptcy Court by the attorney and is a complex and voluminous document that provides information about your current financial situation which includes disclosure of debts, assets, income and expenses along with disclosures about property transfers, payments and gifts made in the past one to two years.
When you file for bankruptcy an automatic stay happens. The automatic stay prevents creditors from taking any action (phone calls, foreclosures, garnishments, lawsuits and repossessions) to collect debts from you. The court provides a notice of petition filing and notice of stay to the creditors you list on your petition. Your creditor may make a motion to lift the stay.
A creditors meeting (341 meeting) is scheduled within four to six weeks after the petition is filed. You and your attorney will meet with the Bankruptcy Trustee that is assigned to your case. This meeting is typically short unless your case has some unusual circumstances. The Bankruptcy Trustee will ask you questions that you should be able to answer easily. It is unusual for your creditors to attend these meetings but sometimes credit card providers do attend so they can ask you questions.
Several things typically happen after the creditors meeting. If applicable, reaffirmation agreements of specific debts (typically, mortgages and auto loans) are signed by the client and the lender and approved by the Bankruptcy Court. The client will complete a debtor education course which is required before the Bankruptcy Court will grant a discharge. If the Chapter 7 creditors meeting is typical, than the client will receive a notice of discharge in approximately 6 to 8 weeks. If the Chapter 13 creditors meeting is typical, than a payment plan will be determined and the client will receive a Notice of Confirmation of the plan in about 6 to 8 weeks and begin making payments to the Bankruptcy Trustee.