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What Happens When Someone Files for Bankruptcy?

After the filing of a bankruptcy, there is a hearing called the “341(a) meeting of creditors.” The hearing is often held between 30 and 45 days from the date that the bankruptcy petition was filed. In a chapter 7 and in chapter 13, the creditors typically have 60 days in order to file any objections to the bankruptcy. If they did not do so within that time their objections are waived.

A chapter 7 bankruptcy would be completed within approximately 4 months. A chapter 13 reorganization takes, at minimum, between 36 months and 60 months.

Unlike the chapter 7, a chapter 13 bankruptcy has an additional hearing, called a “confirmation hearing,” which is where the plan that was proposed in the chapter 13 bankruptcy would be considered for confirmation. During this meeting recommendations are made by the trustee in the case regarding whether the plan should be confirmed or, if there were any objections by creditors that needed to be resolved to have the plan confirmed, and scheduling further hearings to pursue a resolution to those objections. This will require some negotiations, going back and forth to determine how the creditors would be paid and how much they would be paid during the course of that chapter 13 bankruptcy.

How Often Do Objections Come Up?

Each case and each person’s situation is different, but generally speaking the chapter 7 and chapter 13 processes go smoothly if they are done with attention and detail. Objections don’t come usually come up. It is usually smooth for the most part. One of the most valuable thing to do in order to avoid objections is to spend the time to really gather the information and prepare the petition so that the court and the trustee would have all the information that is required. Simply taking the time and not rushing things will avoid many of the simple and common mistakes that may lead to objections.

Also, the person learns about those issues before they come up so they can be proactive and have a strategy ready to resolve those problems or objections when they are raised.

Is That The Only Time Someone Would Have To Go To Court?

For a chapter 7, the only time someone would need to be in court would be for the 341(a) meeting of creditors. In a chapter 13, they would need to attend a 341(a) meeting and if they were not excused, then they would need to attend the confirmation hearing, but other than that, they would not need to be in court.

What Happens After The Meeting Of Creditors?

Following the meeting of creditors for a Chapter 7, the debtor will typically wait for 60 days to pass. If there are no objections, then it is really a formality and would just be a matter of waiting for the court to enter the discharge and close the case.

Prior to the filing of the bankruptcy the debtor took a credit counseling course, which was filed with the petition. In addition to that pre-filing course, the debtor must take a course on personal financial management. The debtor would need to be sure to take the financial management course and have proof that the course was taken filed with the Court order to receive a discharge. There would be a confirmation hearing after the 341 hearing in a chapter 13 situation. Assuming that all of the things had been worked out and the plan was confirmed, the debtor would just need to make sure they made their monthly plan payment to the trustee, and they would need to be sure that when they filed their tax returns, they have submitted a copy of the tax return within 15 days of the filing to the trustee’s office, and then they need to remember that they are to relinquish whatever refunds they received over to the trustee, if required by the confirmed plan.

How Long Would A Chapter 7 Bankruptcy Take?

A chapter 7 bankruptcy would first be reviewed and prepared, and then reviewed and prepared again before filing to make sure that there were no issues that could come up in the bankruptcy process. It should take about 4 to 5 months.

How Long Would A Chapter 13 Bankruptcy Take?

A chapter 13 bankruptcy would depend on the person’s income so if someone was above the median income, then they could expect the process to take 60 months but if they were below the median income, then they could expect it to take 36 months for the bankruptcy process to be completed.

For more information on What Happens During A Bankruptcy, a free initial consultation is your next best step. Get the information and legal answers you’re seeking by
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