What Happens After I File Bankruptcy
Exploring into the unknown world of bankruptcy can be a scary proposition. Our clients frequently ask the following questions:
Is there a trial? Do I have to take the stand? Will I be cross-examined? When will the judge approve my bankruptcy?
First, let’s talk about what happens (or doesn’t happen) in a normal or “typical” Chapter 7 bankruptcy case.
1. You won’t see the judge. That’s right. Bankruptcy is primarily an administrative process so a typical Chapter 7 goes like this:
Case filed -> 341 hearing -> wait 60 days -> discharge (forgiveness of debt). There is no bankruptcy judge who reviews your case, looks at your credit card statements, asks you questions, etc. Assuming no one objects to your case, your discharge will be entered. Chances are if you are standing in front of the judge in a Chapter 7 case, something has gone wrong.
2. Meeting of Creditors “341 Hearing”
After your case is filed, there is one meeting you must attend. It’s called the Meeting of Creditors (because creditors can attend) or “341 Hearing” (referring to the bankruptcy code section that requires the hearing). The most important thing to remember about the meeting is: (1). show up; (2). bring your government issued photo ID and proof of social security card; and (3). relax.
In general, the meeting lasts 3-5 minutes. That’s right. 3-5 minutes! It won’t be anything like what you see on TV (you know all that Law & Order stuff is just TV drama, right?). There’s no judge. The meeting is conducted by the Trustee who’s assigned to your case and despite the name of the meeting, creditors rarely show up. Just to give you an example, in the last 100 meetings I’ve attended, I only had 1 creditor show up and it was the ex-wife of my client. Angry friends, ex-spouses, and family members show up. Discover, Chase, and Bank of America don’t. Why? Because unless you’ve committed fraud, there’s nothing for them to ask you. There’s nothing to talk about.
3. No news is good news. After the 341 Hearing, there is a 60-day waiting period where creditors and the trustee can object to your case. Assuming no one objects, the judge will sign an order discharging your debt. From the day, you file until discharge typically takes 3-4 months.