Process of Filing Chapter 7 Bankruptcy Case
What happens after filing a chapter 7 bankruptcy case?
My name’s Mike Zieglar, I’m the managing attorney for the Debt Fighters, a debt relief firm in Clearwater, Florida.
When someone has filed for chapter 7 bankruptcy, there can be two different starting points. There is what we’d call a standard filing when all the paperwork that is required of the petition is attached to it, and then there’s an emergency filing, which a lot of times is called a bare bones filing. With an emergency filing, a lot of the documents that normally would be attached to the petition paperwork have not been filed with the court. We would see this commonly if someone has an upcoming foreclosure sale date or other emergency that might motivate having to file the bankruptcy a lot faster than you otherwise normally it would.
With a normal bankruptcy filing, after the bankruptcy has been submitted to the court system, first you’re going to get a bankruptcy case number. That case number is important, because if there’s pending litigation you want to inform the state courts of that bankruptcy case number so that they know to stop the ongoing litigation. Likewise, there’s going to be a notice that’s going to go to all the creditors that were listed on the bankruptcy. Generally speaking, that notice is going to come directly from the court system.
A few days after the bankruptcy has been filed, notices will be submitted to the bankruptcy filer explaining who their assigned trustee is and when their 341 meeting is. Once that trustee has been identified, usually, the trustee is going to have a process for submitting the documentation that’s going to allow the trustee to evaluate the case. In a chapter 7 bankruptcy case, a trustee is kind of like a case manager. They’re responsible for most of the diligence in the case. In most courts, the filer is required to provide financial documentation to the trustees so that they can verify that the information in the petition is accurate.
Continuing on with the standard bankruptcy case. Usually, about 45 days after the case has been filed, the filer will have their 341 meeting. That’s when they’re going to meet with the bankruptcy trustee. It’s also an opportunity for the creditors to learn more about the bankruptcy filer and also verify independently the information that’s put into the petition. Around that same timeframe, the filer will look for what we call reaffirmation agreements.
During the bankruptcy process, the filer’s liability on all debts is eliminated. But if there are some debts which usually are going to be secured debts like a car loan or maybe a mortgage, than the filer will have to communicate or interface with that creditor to reach an agreement to reestablish the debt. I just want to know that with secured loans, even though chapter 7 bankruptcy will get rid of the personal liability, it does not get rid of what we call the security interest, meaning the ability of lien holder to recover on that piece of property.
After the 341 meeting is over or around that same time span, the filer is going to want to take their second credit counseling class. And then from there, in most instances, if it’s what we’d call a no asset case, it’s really just a waiting period to get the discharge. I’ll discuss asset cases in another video.
In an emergency filing case, the timeline is mostly the same, but the filer has an obligation to submit the remaining documents into their case. In some instances, the court will send a notice as to the timelines for the additional documents. But in some instances, the court may allow for an extension to that timeline. But it is very important that those documents are submitted promptly after the case is filed. But again, also with an emergency filing case, the filer has an obligation to provide the diligence documents, to attend the 341 meeting, and then also to take the second credit counseling class and inform the court that class has been completed. And in most instances, two to three months later, the filer will get a discharge.
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