How Long Does Chapter 7 Bankruptcy Take?

The average Chapter 7 bankruptcy case takes about four to six months to complete.

The average Chapter 7 bankruptcy case will take from four to six months from the time you file to the time that you receive your discharge (the order that officially wipes out your debt). Your case will take longer, however, if any number of things happen. For instance, a request from the trustee for additional information or documents might result in a short delay. You can expect a longer delay if your case is an “asset” case (the bankruptcy trustee must sell property for the benefit of your creditors) or if you’re involved in a bankruptcy-related lawsuit. In this article, you’ll learn more about the typical Chapter 7 Bankruptcy case, as well as about events that could lengthen the process.

How Does Chapter 7 Bankruptcy Work?

In Chapter 7 bankruptcy you can wipe out most of your nonpriority, unsecured debts, such as credit card balances, personal loans, and medical bills. Not all debts go away, however. You’ll remain responsible for certain obligations, including overdue child and spousal support payments, unpaid taxes, and student loans. In exchange for your discharge, you might have to give up property. But you won’t have to give up everything you own. You’ll “exempt” (keep) the property that your state believes you’ll need to maintain a home and job and surrender any nonexempt property to the bankruptcy trustee (the person in charge of overseeing your case). The trustee will “liquidate” (sell) the nonexempt property and use the proceeds to repay your creditors. Most Chapter 7 filers, however, lose little or no property in bankruptcy. (Learn how exemptions work in Chapter 7 bankruptcy.)

When Does the Chapter 7 Bankruptcy Process Start?

Your Chapter 7 bankruptcy case begins when you file the bankruptcy petition and schedules with the bankruptcy court. The documents provide details about your income, expenses, debts, assets, recent financial transactions, and the property you’re allowed to exempt. (Learn more about filing for Chapter 7 bankruptcy.)

Attending the 341 Meeting of Creditors Hearing

After you file the petition, the court will notify your creditors that all collection activities against you must stop. The court will set the 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, as well. At the hearing, the bankruptcy trustee will place you under oath and ask you a series of routine questions. If any of the information in your petition is unclear, the trustee might ask you to clarify it or provide additional documents. Your creditors will have the right to attend the hearing and ask you questions about your financial situation; however, this rarely happens. Your time with the trustee will likely take less than ten minutes.

If the trustee needs additional information, or if you forget to bring identifying documents—such as your drivers’ license and social security card—to the 341 meeting of creditors, the trustee will continue the hearing to another date, and you’ll have to come back again. Once the trustee receives all necessary information, the 341 meeting will be concluded. Your creditors will have 30 days after the conclusion of the hearing to object to either the discharge of a debt or your entire case.

Filing Your Financial Management Course Completion 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 courses you must take to receive 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. Your case will not be officially closed, however, until the court resolves all outstanding matters, issues the “final decree,” and dismisses your case. (Learn the difference between the bankruptcy discharge and final decree.)

The time it takes your case to progress through bankruptcy will vary depending on your local court because some courts take more or less time to move through the process. A local bankruptcy attorney can tell you how long a case will take in your state or county.

When Your Chapter 7 Case Might Take Longer

Even though most cases are over in less than five months, it isn’t always the case. Here are a few common situations that could cause your Chapter 7 bankruptcy to take longer than expected:

  • The trustee is selling your property. Your matter might remain open if the trustee is selling some of your property. You can expect real estate to take longer to sell than other types of assets.
  • The trustee needs more information. If the trustee asks you to supplement your documents, your case will be delayed until you provide the requested items. The trustee will keep the 341 meeting of creditors open (as opposed to concluding it) by rescheduling the hearing for another date. If you provide the documents before the continued hearing date and the trustee is satisfied with them, the trustee might cancel the new date and conclude the hearing. Otherwise, you’ll have to return to court and answer additional questions about the documents.
  • A creditor wants questions answered. The trustee usually allocates ten minutes of time to each bankruptcy filer (there will be multiple filers at your hearing). If a creditor can’t examine you within that time, or if more than one creditor wants a turn, the trustee might reschedule the hearing to allow for additional questioning. Continuing cases for such purposes happens more in complicated cases, or when the creditor suspects that you’ve committed fraud. Rest assured, however, that it is unlikely that you’ll be surprised—most people are well aware of the potential problems that might surface at their meeting.
  • A motion or complaint needs resolution. If you’re a part of litigation in the bankruptcy court, your case will likely remain open until the lawsuit is settled or decided by the judge. However, it depends on the type of a dispute. For instance, a disagreement between you and the trustee about your ability to exempt your stamp collection will not affect or delay your discharge. By contrast, if your creditor files a complaint to determine the nondischargeability of a debt (asks the court to find that you must pay the obligation after bankruptcy), or objects to your entire discharge, you won’t receive the discharge until the dispute settles or proceeds to trial. This type of lawsuit will likely add at least six months, if not more, to your bankruptcy case.
  • You want to discharge a student loan. If you want to wipe out student loan debt, you must file a complaint alleging that repaying the debt would cause undue hardship and either settle with the lender or prove your case at trial. Some student loan discharge cases can drag on for a year or more. (Learn more about getting rid of student loan debt in bankruptcy.)
  • You delay your debt education course. Before the court orders your discharge, you must take a personal financial management course and file the certificate of completion with the court. If you delay completing this class, your discharge will be postponed. If you delay too long, the court will dismiss your case without a discharge.

An experienced bankruptcy attorney will be able to alert you to issues that might make your Chapter 7 bankruptcy take longer than usual.

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