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How Long It Takes to Declare For Bankruptcy

Written By Finance on Thursday, January 5, 2012 | 2:53 PM

The First Step - Sitting Down With an Attorney. The bankruptcy process begins at your initial consultation with an attorney.

After discussing and evaluating your specific situation, your attorney will make a recommendation concerning which type of bankruptcy will be the best for you. The recommendation will not only be based on the bankruptcy laws, but also on your goals.

The Second Step - Credit Counseling. One of the requirements necessary to file a Chapter 7 or Chapter 13 bankruptcy is that you must take a credit counseling class prior to filing your case. There are several United State Trustee approved credit counseling agencies. Many of these agencies offer classes on-line to accommodate busy people. This class must be taken within 180 days prior to the filing of your bankruptcy. Once completed, you will receive a certificate of course completion. That certificate will be filed with your bankruptcy case.

Filing Your Bankruptcy - The Hard Part Is Over
After you have completed your credit counseling class, you will come in to your attorney's office to review and sign your bankruptcy papers. Your attorney will then file your case with the Bankruptcy Court. Once your bankruptcy is filed, the Automatic Stay is imposed. The Automatic Stay stops anyone from continuing or starting any collection efforts against you without the Bankruptcy Court's permission, including law suits, repossessions, garnishments, and foreclosures.

When your bankruptcy is filed, a Trustee is appointed. In a Chapter 7 Bankruptcy, the Trustee's main job is to review your Bankruptcy Petition and to sell any non-exempt property you have. Don't worry! Most people don't lose anything. Your attorney will let you know before your bankruptcy is filed if you are in danger of losing any property.

In a Chapter 13 Bankruptcy the Trustee's job is different. The Chapter 13 Trustee reviews your Bankruptcy Petition and Chapter 13 Plan to make sure your plan to re-pay your bills will work. The Chapter 13 Trustee also collects payments from you each month. The money collected by the Chapter 13 Trustee is then distributed to your creditors according to your Chapter 13 Plan. The amount of money you will have to pay to the Chapter 13 Trustee and the length of your plan depends on a variety of factors, such as your monthly income, expenses, and the type of bills you have.

Your "Court" Date - The Section 341 Meeting
It's not really court. It is a meeting with the Bankruptcy Trustee assigned to your case, otherwise known as a Section 341 Meeting of Creditors. This usually takes place approximately 30 days after your bankruptcy has been filed. Even though it's called a Meeting of Creditors, creditors rarely show up. The meeting typically takes only 10 minutes and is generally pretty simple. The Bankruptcy Trustee will ask you questions, under oath, based on the information contained in your Bankruptcy Petition.

One Last Class To Take
In order to receive your bankruptcy discharge (which is what you are shooting for) you are required to take a Debtor Education Course. This course is very informative and helps people in identifying financial issues to work on in the future. Like the Credit Counseling Class, the Debtor Education course can be taken on-line. This course typically takes a little over an hour. Once completed, you will receive a Certificate of Completion which your attorney will file with the bankruptcy court.

Discharge - You're All Done!
In a Chapter 7 Bankruptcy, you will receive your discharge approximately 75 days after your Section 341 Meeting of Creditors. In a Chapter 13 bankruptcy, you will receive your discharge once you have successfully completed your Chapter 13 Plan. The Discharge is the document issued by the Bankruptcy Court which officially relieves you of your dischargeable debt. Please note that some debts cannot be discharged in a bankruptcy. Examples of non-dischargeable debts include most student loans, most taxes and other debts owed to the government, child support obligations, and debts that were not included in a Chapter 13 plan. Your attorney will advise you concerning which of your debts will be discharged and which debts will not.

Charles Glanzer is one of the founding partners of Glanzer & Associates, P.C. Charlie has been licensed to practice law in Illinois since 1992, and has worked for some of Chicago's largest bankruptcy firms. Charlie focuses his practice on representing clients in Chapter 7 and Chapter 13 bankruptcy cases. Charlie represents his clients with a high level of sensitivity and professionalism, and has discharged millions of dollars of debt for his clients. Charlie's commitment to helping people in financial distress not only involves relieving his clients of their financial burden, but also counseling them about life after bankruptcy and rebuilding their credit.

Disclaimer: This answer does not constitute legal advice. I am admitted in the State of Illinois only and make no attempt to opine on matters of law that are not relevant to Illinois. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship.

By Charles E Glanzer

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