The low level of time and effort necessary to discharge most of your debt through Chapter 7 bankruptcy (with an attorney) is another great benefit to the bankruptcy system. Note, this article discusses Chapter 7 bankruptcy timeframe, and not Chapter 11, 13, or any other bankruptcy filing.
A Chapter 7 bankruptcy is a complete discharge of a unsecured debt. In order to qualify for a Chapter 7 bankruptcy, your income from the last six months must be at or below the median income for a household of your size. The exact numerical value differs depending on the number of dependents you have, and median income in the area where you live.
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For the client, the full process usually takes no more than an afternoon and a couple hours for a discharge meeting at the courthouse.
First, the client usually needs to have a meeting with an attorney. These meetings are typically scheduled for an hour, and depending on the depth of the conversation and how talkative the attorney and client is, the meeting can last as little as 15 to 30 minutes.
Second, the client needs to fill out an information packet that is very robust but can be done in a few hours in an evening. Running through bills and reviewing paperwork to find every debt you have can be tedious and the time it takes can differ depending on how organized you are and how many debts you have. For debts missing, a few calls and most creditors have no problem sending you your information.
Next, you need to attend two online debtors courses, each taking about 45 minutes apiece. These can be done at home or your local library.
Finally, the only steps left for those with attorneys is to review their documents before filing (10 to 20 minutes), read a two page information sheet (5 minutes), and to attend their 341 meeting - a court appearance where you answer a few yes/no questions on the record and the trustee declares your debts discharged. Absent a challenge from a creditor, that's it. The meeting can be very quick or can take a while to get through depending on the last name of your attorney. Clients are called based on the alphabetical order of the attorneys. Depending on how talkative the trustee is, each client really only takes about 5 minutes at the most. For those trustees who talk more, and like to hear the stories of talkative clients, it might take a bit longer.
So that's it. For those who choose to not use an attorney, it can take weeks and months to learn the necessary paperwork, the correct exemptions, how to do a "means test"; and since most non-attorneys mess up quit a bit, it will take several attempts in order to get a filing through - and that's if you don't mess up and get our case dismissed.
So use an attorney - paying a little over $1,000 (most attorneys permit you to do a payment plan over several months) will save you a ton of time and hassle. More importantly, you'll get all of your debts erased and you won't run the risk of inadvertently getting your case dismissed or providing the court with incorrect information - which might result in jail time.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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