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What is the process for Chapter 7 bankruptcy?

| Mar 17, 2021 | bankruptcy

Bankruptcy offers people struggling with considerable debt to discharge that debt and take back control over their financial future. While more than 500,000 Americans discharge their debt through bankruptcy every year, they do not experience this discharge immediately after applying for the benefit.

Chapter 7 bankruptcy can take as long as two months to receive the discharge on your debt, but why does it take so long to get rid of your debt? Here is what the bankruptcy process looks like:

Submitting your paperwork

The documents necessary to apply for bankruptcy require you to provide detailed information about your income, debts, assets, transactions, expenses, and property that you can exempt from your application. Once you are certain that you have correctly completed the application paperwork, you will then need to submit it to the court.

Your creditors hearing

Once the court receives your application for bankruptcy, the court will alert any creditors that they need to stop their collections processes against you. The court will then schedule a 341 meeting of creditors hearing that typically occurs between 20 and 40 days after your filing date. This hearing will consist of you answering a series of routine questions under oath and often takes less than 10 minutes.

Supplying additional information

Suppose you fail to provide necessary information like identification documents during your 341 hearing. In that case, you may need to reschedule the hearing to a later date so you can provide the necessary information.

Taking a financial management course

Part of the application process requires an applicant to complete a financial management course to discharge your debt. This course teaches the applicant methods of avoiding any future bankruptcy.

Discharging the debt

Once you have completed everything necessary, the court will then discharge your unsecured dead. This discharge typically occurs about two months after your 341 meeting, depending on how long your mailing process takes. Once the court resolves any outstanding issues regarding your case, they will issue a “final decree” before dismissing it.

Avoid unnecessary delays

Any number of issues can delay your application process from failing to provide the necessary information to having issues selling applicable properties. A bankruptcy attorney can help guide you through your application process and reduce the time it takes between when you start your application and when you receive your discharge.

 

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