Zuckerberg Bankruptcy Law Office

Many of the questions I hear from both blog readers and from the dozens of Indiana bankruptcy clients I meet with each week center around timelines.  In other words, people want to know what the different steps are in the bankruptcy process and how long it takes for each step to happen.  I decided I'd devote today's blog post to a review of an Indiana Chapter 7 bankruptcy and a typical timeline for that kind of bankruptcy process.  

First, by way of quick review, the major purpose of bankruptcy legislation is "to afford the opportunity to a person hopelessly burdened with debt to erase his or her debt and thereby get a fresh financial start."  Bankruptcy Action goes on to explain that "debtors are usually discharged 3-5 months after bankruptcy is filed.  At that time debts (with some exceptions) are written off."

In "An Overview of the Chapter 7 Bankruptcy Process", John Ventura, author of The Bankruptcy Handbook, explains that there are four different stages in a bankruptcy:

   1.  You file Chapter 7.

   2.  The trustee takes control of non-exempt assets, sells them, and distributes the 
        proceeds to creditors.

   3. The court discharges all remaining debts (except nondischargeable debt and re-affirmed debt).

   4. You're out of bankruptcy.


An actual timetable in terms of number of days is found on the website bankruptcyaction.com:

Day #1 -The bankruptcy documents are filed with the court.
Much of my work as an Indiana bankruptcy lawyer involves the research and client counseling leading up to preparing these very documents.

Day #14 - Creditors are notified a petition has been filed.

Day #20 - #40 - Creditors' meeting is held at t6he Court.
This is also called the 341 meeting.  (See "The Creditors' Meeting - Be There or Be Square!")

Day #20 - #30 and after -  Trustee sells non-exempt assets. 
I need to point out that, in almost all Chapter 7 cases, debtors do not end up losing any of their assets.

Day #90 - Unsecured creditors' deadline to file claims.

Day #60 - 90  Debtor discharged.