Monday, March 14, 2011

The Chapter 7 Bankruptcy Process

            As a bankruptcy attorney I have seen many Chapter 7 Bankruptcy cases through from filing to discharge.  However, I know that my clients and people considering filing bankruptcy are unsure of the process, so today I wanted to concentrate on the timeline of a Chapter 7 Bankruptcy in the Southern District of Indiana.

           Once you have found and retained a bankruptcy attorney you will likely have quite a bit of work on your hands.  There will probably be a questionnaire the bankruptcy attorney gives you to complete and a list of other documents the attorney needs to prepare your bankruptcy petition.  There is no doubt that it is a pain to gather all of this information.  However, it is very important to give your attorney a complete picture of your finances, which he or she obtains from the information you provide.  This way your attorney can advise you in the best manner for your situation.  You will also have to complete a credit counseling course prior to the filing of the bankruptcy petition.  Your attorney can tell you more about this, but it is a class that you normally take online or over the telephone.  I normally meet with my clients a second time to review their questionnaire and documents.  It is typical for the client to have questions about filling out the questionnaire or for me to have questions about what they wrote down.

          After meeting with the client to go over their questionnaire and documents I begin to prepare a draft of their Chapter 7 Bankruptcy Petition.  A typical petition is approximately 50 pages.  For me, it typically takes about a week before I am finished with a petition, and this is assuming that the client gathered all of the information I needed at the first meeting.  At this point I have the client(s) come in to my office again to review a draft of the petition.  At this time I explain the petition, make sure that the information in the petition is correct and let the client know if we need any additional information to complete the petition.  At the end of this meeting I will usually set a date for the client(s) to come back in to review a copy of their final bankruptcy petition.

         When the client returns to review their final bankruptcy petition we spend about 30 minutes to review the petition and have the client(s) sign it.  After the client leaves I then file the petition electronically.  This means that on the day your bankruptcy petition is filed you do not make any court appearance.  About 2 business days after the petition is filed I will receive an e-mail from the Bankruptcy Court letting me know your hearing date, which is called your 341 meeting of creditors.  Your 341 meeting of creditors is usually 30 to 45 days after the filing of your bankruptcy petition.  In the Southern District of Indiana if you live in Howard County your hearing will be in Kokomo, if you live in Madison County your hearing will be in Anderson and for those living in Marion County and the surrounding counties the hearing will be in downtown Indianapolis.  I send my clients a copy of the notice of hearing with the full address and time of the hearing as soon as possible so that they are able to get the hearing day off of work.

          Prior to the 341 hearing, attorneys are required to send the bankruptcy trustee in the case some documents along with a form called the "Document Production" form.  So, I will typically send this document to my clients for their signature and a request for a few more documents shortly after they receive notice of their hearing.

          Once the 341 hearing date arrives I meet my client(s) about 15 minutes prior to the hearing to go over questions they should expect to hear from the trustee and to answer any questions.  Sometimes the hearings run behind schedule and it is necessary to wait for a little while prior to your hearing being called.  However, once the hearing is called it rarely takes more than 5 minutes to complete.  If you want to know more about what to expect at the 341 meeting click here for a previous blog.

          After the hearing is over bankruptcy debtors are required to complete a second course on financial management.  This must be done within 45 days of the 341 hearing.  If debtors fail to complete this course it may result in the case being closed without a discharge.

         In most cases the Chapter 7 bankruptcy debtor receives their discharge about 60 days after the 341 hearing.  The discharge is the legal forgiveness of any of the debtor's dischargeable debts.  In many cases, receipt of the discharge means that the case is over.  However, it is possible that the trustee will hold the case open to allow time to claim the trustee's portion of your income tax refund or to tie up any other loose ends in your case.  It is important for you and your attorney to have good communication so you know when your case has really ended.

        If you live in the Indianapolis or surrounding areas and are considering bankruptcy please call Halcomb Singler, LLP, at 317-575-8222.  We can set up a free consultation for you to meet with me and I will be happy to answer your questions about bankruptcy and whether or not I believe it will be beneficial to you.

Halcomb Singler, LLP, is a debt relief agency.  It helps people file for bankruptcy under the bankruptcy code.  No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so.  The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.

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