I am commonly asked to explain the process of filing for chapter 7 bankruptcy protection. Specifically, most clients are interested in the answer to a single question.

When will this finally be over?

See, more often than not, those debtors that come to be seeking relief under the bankruptcy code have been struggling with debt for quite some time. This means that, by the time they initiate the process of filing for bankruptcy protection, they have already gone 8 rounds and are losing steam fast. 

The bad news is that filing for bankruptcy is not an easy process. What about the good news? If you hire an experienced bankruptcy lawyer to handle your case, the hardest part of filing for bankruptcy is likely making the decision to file for bankruptcy. See, after an attorney takes control of your case, your job is generally limited to waiting for discharge.

For those wondering how long it takes to file bankruptcy, let’s consider your average chapter 7 case:

Step 1: Meeting with a qualified bankruptcy lawyer: Most clients pay an initial retainer of $100 which allows me to handle their creditor correspondence because, at this point, they have retained me as their attorney. Over the next few days/weeks/months, they pay off the remaining legal fees and gather the paperwork that I need to file their case.

Step 2: Filing your bankruptcy case: Once a client has submitted ALL required documents, and can begin preparing their bankruptcy petition. It is important to realize that it takes time to prepare your documents. Filing for bankruptcy requires the submission of roughly 50 pages of information related to your specific financial situation.

This means that, unless we have talked prior about your need to file as an emergency (due to pending garnishment, foreclosure, etc.), your petition will likely not be filed immediately after you submit your paperwork. I have heard some attorneys take up to 6 months to file a petition. While that is probably a bit excessive, it is important to understand that we have a significant amount of work that can only be completed after you submit your financial documents.

As an aside, it is probably not helpful to scream and yell and call your attorney dirty names (unless, of course, your attorney is the 6-month guy I mentioned above). What you can do is ensure that the documents you submit are complete. What if you don’t have the title to your vehicle? Request a copy from the lien-holder. What if you can’t find pay stubs from the requested look-back period? Contact your payroll department for duplicates. Please don’t just omit this information, as I cannot file your case without it.

Step 3: Attend your meeting of creditors: Upon filing, your case will be randomly assigned to a local bankruptcy trustee. The trustee works to ensure your petition is filed correctly and your creditors are treated fairly according to rules defined in the bankruptcy code. For a chapter 7 bankruptcy case, this generally amounts to ensuring that that there is no non-exempt property. If such property exists, it is the job of the trustee to arrange collection and sale of the property. Proceeds are then distributed to creditors.

The 341 hearing also gives creditors an opportunity to ask questions regarding your bankruptcy case, if they feel that they are not being protected as outlined in the bankruptcy code. It has been my experienced that creditors don’t generally attend these hearings. However, it can occur.

Step 4: Wait for your discharge: provided your paperwork is complete and the trustee has found no reason for concern (like that Rolex you claim is a $20 knock-off), the remainder of your case is generally spent waiting for discharge. The court will notify you of your discharge, which means that in all practical senses, your bankruptcy is complete.

It is important to understand that, at this point your case is not closed. In addition, once your case is closed, it can be reopened for a number of reasons. However, this does not apply to most chapter 7 bankruptcy cases

Now back to the question at hand. How long does it take to receive a discharge in chapter 7 bankruptcy? A rough guess is 4 months…..+/- 2 or 3 months. There are a lot of variables that come into play, including: how busy your attorney is, how busy the bankruptcy trustees are in your district, whether you have any non-exempt property that must be liquidated, and so on.