Most Chapter 7 cases take from four to six months to complete. It might take longer if any number of things happen, such as:
- you need to provide more information or documents
- the bankruptcy trustee must sell property, or
- you're involved in a bankruptcy-related lawsuit.
In this article, you'll learn more about the time it will take to get through the Chapter 7 bankruptcy process.
How Does Chapter 7 Bankruptcy Work?
A Chapter 7 bankruptcy lets you eliminate or "discharge" qualifying debt without paying into a repayment plan. You'll learn whether you qualify by passing the means test.
You'll also get to keep the property needed to maintain your home and job. Things you can't protect under your state's exemption statutes get sold, and the proceeds go to repay your creditors.
How Long Will Chapter 7 Bankruptcy Take?
Most Chapter 7 cases are problem-free and close in approximately four months. How long your Chapter 7 case will take to go through bankruptcy will vary depending on the facts of your case.
Here's what you can expect.
- Filing your paperwork. Your Chapter 7 bankruptcy case begins when you file the bankruptcy paperwork with the court. The documents provide details about your income, expenses, debts, assets, recent financial transactions, and the property you're allowed to exempt.
- Attending the 341 meeting of creditors hearing. After you file, the court will notify your creditors that all collection activities against you must stop. The court will set a date for the one court appearance you'll be required to attend, called the 341 meeting of creditors hearing, between 20 and 40 days after you file. At the hearing, the bankruptcy trustee will place you under oath and ask you routine questions. Your creditors will also have the right to ask questions, but this rarely happens. Your time with the Chapter 7 trustee appointed to your case will likely take less than ten minutes.
- Providing additional information. If the trustee needs additional information, or if you forget to bring identifying documents—such as your driver's license and social security card—to the 341 meeting of creditors, the trustee will continue the hearing to another date. The trustee will conclude the hearing after receiving all the necessary information. Your creditors will have 30 days after the hearing concludes to object to either the discharge of a particular debt or your entire case.
- Filing the financial management course certificate. Once you receive the notice of your 341 meeting of creditors, you're free to complete your financial management course—the second of the two classes required for a discharge. You must complete it within 60 days of the first date set for the 341 meeting of creditors.
- Receiving your discharge. Assuming that everything goes according to schedule, you can expect to receive your bankruptcy discharge (the court order that wipes out your debts) about 60 days after your 341 meeting of creditors hearing, plus a few days for mailing. However, your case won't be officially closed until the court resolves all outstanding matters, issues the "final decree," and dismisses your case.
Why It Might Take Longer to Complete Your Chapter 7 Bankruptcy
The bankruptcy court usually grants a discharge and closes the case in less than five months, but things don't always go that smoothly. How long the delay might take depends on the problem involved.
- Short delay. If you don't provide information when you should, but you correct the problem quickly, your discharge and the closure of your case will be delayed briefly by no more than a month in most cases.
- Moderate to long delay. If a property issue exists, you'll likely receive your discharge promptly, but your case will remain open while the property issue gets resolved. The length of the delay usually depends on the dispute's complexity or the time it takes the trustee to sell the property.
- Long delay. If there's a question about whether you should receive a discharge, you'll likely be involved in a bankruptcy lawsuit. The bankruptcy court could delay your discharge and the closure of your case by six months to a year.
Situations That Might Make a Chapter 7 Case Longer
Here are some typical situations that could cause your Chapter 7 bankruptcy to remain open longer:
- The trustee needs more information. If the trustee asks you to supplement your documents, the trustee will delay your case until you provide the requested items. The trustee will reschedule the 341 meeting of creditors, which has the effect of pushing back other deadlines that must pass before your case can close. If you provide the documents before the continued hearing date to the trustee's satisfaction, the trustee might cancel the new date and conclude the hearing. Otherwise, you'll have to return to court.
- A creditor wants questions answered. Multiple filers will attend your hearing, so the trustee usually allocates ten minutes to each bankruptcy case. If all creditor questions can't be addressed during that time, the trustee might reschedule the hearing. Continued meetings happen more often in complicated cases, or when the creditor suspects that you've committed fraud. Your case will be delayed until the meeting is concluded and possibly longer if the creditor objects to the discharge of its debt.
- The trustee is selling your property. Your matter might remain open if the trustee needs to sell some of your property, but it won't delay your discharge. The case will remain open until the trustee sells the property, distributes the funds to creditors, and submits a final report to the court. You can expect real estate to take longer to sell than other assets.
- A motion or complaint needs resolution. Some bankruptcy cases involve issues a bankruptcy judge must resolve, but not all litigation will delay your case. For instance, a disagreement about your ability to exempt your stamp collection won't affect or delay your discharge. But suppose your creditor asks the court to find that you should repay a debt by filing a complaint to determine the nondischargeability or objects to your entire bankruptcy. In that case, you won't receive the discharge until the matter gets resolved. Plan on the lawsuit adding six or more months to your case.
- You want to discharge a student loan. Wiping out student loan debt doesn't happen automatically. Instead, you'd need to file a bankruptcy lawsuit called an "adversary proceeding" explaining that repaying the debt would cause undue hardship. You'd discharge your student loans by either settling with the lender or proving your case at trial before receiving the discharge. Your case would remain open until you resolved the student loan matter. Learn more about getting rid of student loan debt in bankruptcy.
An experienced bankruptcy lawyer will be able to alert you to issues that might make your Chapter 7 bankruptcy longer than most.
Need More Bankruptcy Help?
Did you know Nolo has been making the law easy for over fifty years? It's true—and we want to make sure you find what you need. Below you'll find more articles explaining how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!
We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.