Most Chapter 7 bankruptcies are completed within three to four months. Some of the variables in this time frame include the time it takes you to prepare the complicated petition and the existence of any negative events in your case, such as objections from creditors or the bankruptcy trustee. The workload of your local bankruptcy district also might affect the speed with which you receive your bankruptcy discharge.
A properly completed Chapter 7 bankruptcy petition is a lengthy document, and just filling it out can take a significant amount of time. You must include all details of your financial life on the petition, from income and expenses to debt, creditors and cash and property transfers. You must correctly cite legal property exemptions and attach additional information such as pay stubs and local bankruptcy district forms. While using a bankruptcy lawyer can help speed up the process, you still have to collect documentation for all your information to provide to the attorney. It may take days, weeks or even months to correctly prepare your documents for bankruptcy.
Section 341 Meeting of Creditors
Once you file your Chapter 7 petition, the rest of your case unfolds at a more predictable pace. By law, the next step in the process must occur within 20 to 40 days after you file bankruptcy. Known as the meeting of creditors, the 341 meeting typically is a short exchange between you and your bankruptcy trustee about the contents of your petition. Creditors also may attend and ask you questions.
A Chapter 7 bankruptcy case is scheduled for discharge 60 days after the completion of the 341 meeting. Generally, bankruptcy courts have a large number of cases, and you may not receive the actual discharge for a few days or a few weeks. In business districts such as the Central District of California, which serves Los Angeles and the surrounding communities, discharges often come 90 days or more after the 341 meeting.
Adversary Proceedings and Objections
If you are the subject of any adversary proceedings, it can delay the bankruptcy process. An adversary proceeding is a lawsuit within the bankruptcy case that must be resolved before a discharge can be issued. If you bought thousands of dollars of luxury goods on credit immediately before you filed bankruptcy, your creditors may sue you via an adversary proceeding claiming that those charges should not be included in your bankruptcy discharge. The Office of the United States Trustee also may object to your discharge in certain situations, such as a determination that you have enough disposable income to pay off your creditors. Either of these circumstances may delay your discharge for an indefinite length of time.