Bankruptcy Timeline
If you need debt relief and are considering bankruptcy as an option, please call my office for a free consultation.
8 years prior to Filing of Bankruptcy
You are prohibited from receiving a discharge under Chapter 7 if you received a discharge in a previous Chapter 7 bankruptcy within the last 8 years. A discharge may still be granted under certain limited circumstances if the prior bankruptcy was a Chapter 12 or 13 filings. This restriction does not apply to the filing of Chapter 13 after any prior bankruptcy.
1 year prior to the filing of Bankruptcy
The court may deny you a discharge of any and all debt if, in an attempt to hinder, delay or defraud a creditor, you transferred, removed, destroyed, or concealed property within one year prior to the filing of your Chapter 7 petition. The trustee may recover the property from the person to whom it was transferred.
180 days prior to the filing of Bankruptcy
To file in a given district (for example, Pittsburgh area residents would file in the U.S. Bankruptcy Court’s Western District of Pennsylvania), a debtor must have had a residence, principal place of business, or principal assets in the district for 180 days immediately preceding the date of filing, or for a longer part of such 180 days than in any other district.
90 days prior to the filing of Bankruptcy
A creditor may file an objection to, and the Court may deny you, discharge of any debt greater than $500 incurred for the purchase of “luxury goods or services” within 90 days preceding the filing of a petition, or for debts greater than $750 for cash advances within 70 days before filing.
A total of $600 or more in money or property which is transferred to a creditor within 90 days prior to filing on an ‘antecedent’ debt (that is, a debt that existed before the payment was made) is deemed under bankruptcy law to be a ‘preference’. The Trustee may “avoid” the transfer, recover the money and/or property, and divide the money equally between all creditors.
Bankruptcy Filed
A case is said to have been ‘commenced’ the moment it is filed with the Court. If they are not filed together with the petition, the debtor’s Declaration Regarding Electronic Filing (the document signed by the debtor authorizing his or her attorney to file the petition with the Court) and Statement of Intention (the document indicating the debtor’s election regarding secured debts such as mortgages or car payments) are due no later than 15 days after the case is commenced. If any schedules, statements, etc. are lacking when the case is first filed, they too are due no later than 15 days after the case is commenced.
30 days after the Filing of Bankruptcy
Approximately one month after a petition is filed, the Section 341 (creditors’) meeting is held. Debtors and their attorneys are required to attend this meeting. Debtors must testify under oath, answering any and all questions asked by the trustee. Creditors (and their attorney if they so choose) are allowed to attend and ask questions of their own, but most often do not. The failure of creditors to attend the meeting does not affect their right to later object to the discharge in a Chapter 7 case or to the plan in Chapter 13. If the debtor fails to appear, the case will be ‘adjourned’ (that is, postponed) only once before the entry of a rule to show cause why the case should not be dismissed.
30 days after the Creditors’ Meeting
Creditors and the Trustee have until 30 days after the conclusion of the creditors’ meeting under Section 341 to object to the property exemptions you have claimed in Schedule C. Exemption limits for various categories of property are set forth in Section 522 of the Bankruptcy Code. For example, the exemption limit for jewelry under Section 522(d)(4) is $1,600; for household goods, furnishings, and appliances under Section 522(d)(3) the aggregate limit is $12,625. These figures would be doubled for joint (husband and wife) filers.
60 days after the Creditors’ Meeting
The debtor must, within 60 days of the first date set for the creditors’ meeting, complete a course in personal financial management. Alternately (and sometimes confusingly) referred to as “pre-discharge”, “post-filing”, or “post-petition”, this course must be completed, and ‘Official Form 23’ (which verifies completion) filed with the Court, by this deadline; otherwise, the case may be closed by the Court, with no further notice, without the issuance of a discharge.
Creditors have until 60 days after the first date set for creditor’s meeting to file a complaint under Section 523(c) objecting to the debtor’s discharge generally or, more commonly, to the dischargeability of certain specific debts (for example, debts that were obtained by misrepresentation or fraud; debt from fraud or defalcation while acting in a fiduciary capacity, debt arising from embezzlement or larceny; debt for willful and malicious injury; and certain debts to a spouse, former spouse, or child of the debtor). The most commonly filed objections are those to the dischargeability of a debt greater than $500 incurred for the purchase of “luxury goods or services” within 90 days preceding the filing of a petition, or of debts greater than $750 for cash advances within 70 days before filing.
10-12 weeks after the Creditors’ Meeting
This is the approximate time when the debtor can expect to receive his or her discharge. A variety of factors can delay this date, such as objections filed by the trustee or creditors (or any other ‘adversarial’ actions filed against the debtor), or a pending sale by the trustee of ‘bankruptcy estate’ property. Simultaneously with the issuance of the debtor’s discharge, the case is closed and a final decree is issued.
Contact my office today for a consultation. I can help you decide if Bankruptcy is the right choice for you, and you can rest assured that your case will be handled the right way.