How Fast Can You Get a Chapter 7 Bankruptcy Discharge?

Chapter 7 is the simplest type of consumer bankruptcy, since it usually results in a discharge of most or all debt. It’s also the quickest. Cases are typically completed in four to six months, compared with a Chapter 13 loan, which takes years. That said, there are scenarios and circumstances that might result in your case exceeding the six-month time frame.

The basic Chapter 7 process entails just a few steps. The debtor files a petition in the local bankruptcy court, which then sends notice of the filing to all creditors. About one month after the petition filing, the court schedules a meeting of creditors, also known as a 341 meeting. In the meantime, the debtor can complete the financial management classes mandated by law. At the meeting — which creditors rarely attend — the court-appointed bankruptcy trustee reviews all case documentation and asks the debtor some questions on the record. If the trustee is satisfied that there are no outstanding hurdles to discharge, the debtor will receive a discharge from the court a few months after the meeting.

While most Chapter 7 matters go smoothly, there may be delays resulting from the following:

• Financial record issues — If there are incomplete or inaccurate financial documents, the bankruptcy trustee will request additional or corrected information. To avoid this cause of delay, a debtor should be sure that all financial records are in order and that all necessary documents are submitted.
• Creditor objections — A creditor’s objection to discharge of a certain debt can require additional court proceedings. The debtor can minimize the chances of an objection by being clear and thorough in providing all financial information.
• Property sales — Debtors in Chapter 7 bankruptcy cases can keep much or all of their property by using legally permissible exemptions. However, occasionally an asset will have to be sold off by the bankruptcy trustee. An example is when an exemption covers only part of the equity in a home. Depending upon the nature of the property, a sale can take several weeks.

Most debtors are not harmed by delays in a Chapter 7 proceeding. The law imposes an automatic stay that forbids creditors from taking action to collect debts while the bankruptcy case is pending. However, a significant delay in discharge postpones the debtor’s ability to get a fresh start and to start rebuilding credit. Although the Chapter 7 process is generally straightforward, a debtor is best served by hiring a consumer bankruptcy attorney for effective guidance throughout the case.

Jeff Field & Associates is one of the largest bankruptcy and debt relief law firms in the Atlanta, Marietta and Athens areas of Georgia. If you are struggling with consumer debt, contact us online or call 404-381-1278 for a free initial consultation.