There are two different types of bankruptcy cases that most people (consumers) file for: Liquidation Chapter 7 bankruptcy and Reorganization Chapter 13 Bankruptcy. Chapter 7 bankruptcy is the most common type of bankruptcy filed in the United States by a very large margin.
A common question we get is, how long does a Chapter 7 bankruptcy take?. This blog post will focus on Chapter 7 bankruptcy since it makes up the vast majority of cases filed.
Short Answer: A Chapter 7 bankruptcy takes about 4 months from filing to discharge. See below for an explanation of the timeline.
In nearly all bankruptcy cases, a significant amount of time must be devoted to completing the required preparations to file for bankruptcy, we will call this the “pre-filing requirements”. Most people who consider bankruptcy do not understand the significant amount of time and work they will have to invest in order to get their case filed.
The first step is to retain the services of a bankruptcy attorney, unless you plan on representing yourself. You will have to call and meet with at least one bankruptcy attorney. Most bankruptcy attorneys offer free consultations, so this should not cost anything. Even if you have to pay a small fee for a consultation, it will be very worthwhile. Consulting with a bankruptcy attorney can be completed within a week. If you consult with multiple bankruptcy attorneys, this can take several weeks to complete.
After you decide upon an attorney you like, you will have to sign a retainer agreement (contract for services) and pay your fees. Some bankruptcy attorneys have payment plans and some do not.
In most cases, paying your attorney through a payment plan will add significant time to your case. Many people simply do not have the fees in full and need a payment plan lasting several months to pay off their fees. Others will wait to save enough money to pay their attorney.
Once payment is arranged, there are other pre-filing preparations which will have to be completed. In order to file bankruptcy, an online credit counseling course must be completed. The course ranges in cost from $10 to $50 and most are online. There are even some class providers that allow for a telephone class. The course takes about 1 hour to complete.
If you have retained the services of a bankruptcy attorney, you will likely have to complete a bankruptcy questionnaire. Some bankruptcy attorneys still use a paper questionnaire and others use an online questionnaire. You must complete this questionnaire so that your bankruptcy lawyer can properly fill out your bankruptcy petition. Completing your questionnaire can take anywhere from 1 hour to 3 hours or more, depending on your situation.
Prior to filing, your bankruptcy lawyer will also need certain financial documents from you. The most common types of documents are: tax returns, pay stubs, bank statements, financial account statements, mortgage statements, car statements, lawsuits, judgments, and wage garnishment orders. Your lawyer should give you a list of all documents required when you sign your retainer agreement. Obtaining documents from employers, tax professionals or financial institutions can also add time to your case.
In many cases people take significant time to complete the pre-filing requirements. Some people can complete all their requirements in as quickly as one day, while others can take weeks or even months.
Once all the pre-filing requirements are completed, you should have some type of review with your attorney, where you review all the information in your bankruptcy petition. After reviewing your bankruptcy petition, you will sign your petition and your bankruptcy lawyer will file it.
After your bankruptcy case is filed, you will have to attend your Meeting of Creditors. This appearance is required for all bankruptcy filers.
After the Meeting of Creditors, you will receive a discharge about 60 to 90 days thereafter and your case will be dismissed.
Once your case is filed, a bankruptcy case filed in the Central District of California (covers Los Angeles, Orange and San Bernardino Counties) typically takes about 4 months from filing to discharge. Some cases take longer to discharge for a variety of reasons, but most Chapter 7 Bankruptcy cases should be done within 6 months of filing.