No two bankruptcy cases are alike, but Chapter 7 bankruptcy cases follow a similar timeline. For best results, you need to understand how the process works. An attorney experienced in Salt Lake City Chapter 7 bankruptcy is the right person to guide you through the timeline and help you avoid mistakes.
There are important steps to take before filing a bankruptcy petition—and mistakes made during the pre-bankruptcy phase might delay the case or even prevent a discharge entirely.
During the pre-bankruptcy phase, you are required to complete a credit counseling course. Many jurisdictions allow you to complete this course over the phone or online. Proof of completion of this course is mandatory, and failure to do so will keep you from continuing with your case.
It is also important to know that any effort to hide or give away assets in the year preceding a bankruptcy filing may result in the denial of the discharge or even the forced transfer of those assets to creditors.
To initiate a bankruptcy, begin by filing a series of documents. The first is the bankruptcy petition. Filing the petition creates the bankruptcy estate and initiates the automatic stay. The moment bankruptcy is filed, the automatic stay prevents creditors from pursuing collection efforts against you.
You must also file schedules and lists outlining your estate’s assets, debts, and creditors. While many people choose to file these schedules along with the petition, the bankruptcy code gives you 14 days to provide these documents. Additionally, you’ll need to supply the bankruptcy trustee with a copy of your tax returns for the previous three years. If you were not required to file a tax return in one or more of those years, you can file an Affidavit of No Tax Due for the applicable years.
Within 30 days of filing, the bankruptcy trustee will typically notify you of the date for the meeting with your creditors. Despite the name, the creditors of the estate rarely attend this meeting. Instead, the meeting is typically an informal discussion between you and the trustee about your assets and liabilities.
Prior to COVID-19, the meeting of creditors was held in person at the Federal Courthouse. However, to comply with CDC recommendations, these meetings now take place telephonically. Your lawyer will brief you ahead of the meeting so that you know what to expect. Your lawyer attends this meeting with you, but you are the one who will be answering the trustee’s questions. While most bankruptcy debtors dread the meeting, it is really nothing to fear, and debtors find that their stress was unnecessary.
While this meeting is often a formality, in rare cases, the trustee could object to a debtor’s claimed exemptions or seek turnover of property that may not be exempt from the estate. A trustee’s objection does not delay the debtor’s discharge, but it may delay the closing of the bankruptcy estate. Most trustee issues are resolved through negotiation and an agreement to pay the trustee some money for the value of non-exempt assets.
If the trustee does not file an objection to discharge, a bankruptcy case could wrap up rather quickly. The final step involves mandatory budget counseling within 60 days of the creditor’s meeting. This is different from the credit counseling course that is required prior to filing for bankruptcy. Once the court has certification of completion, the judge issues the discharge and closes the case.
By understanding the timeline for a Chapter 7 bankruptcy in Salt Lake City, you improve your chances of your case going smoothly. The bankruptcy process is complex, but careful preparation reduces unnecessary delays. Call today to learn more about how a skilled attorney helps you meet every requirement in the Chapter 7 bankruptcy process.