More than 1.5 million people file for bankruptcy each year.
Bankruptcy is a legal process that offers hope and financial relief to people who desperately need it. But, it isn’t an overnight process. Instead, it takes time and work.
If you’re struggling with piles of debt and don’t know what to do, you might want to research your bankruptcy options. After all, filing might provide the relief you need.
You can speak to a bankruptcy lawyer to learn more about it. A lawyer can help you understand how it works and the timeline. If you’re interested in learning the time it takes to file for bankruptcy, continue reading this guide.
Choose a Lawyer
If you read a guide to bankruptcy, you’ll always find that the first step is choosing a bankruptcy attorney. Of course, you have the legal right to file without one, but this isn’t the best option.
When filing without one, so many things can go wrong, impeding your case and preventing you from receiving the benefits that bankruptcy offers. Therefore, you should start this process by selecting one.
You may want to choose one based on their location, experience, and reputation. Many people also choose one based on recommendations from friends and family.
You may even want to meet with one or two to learn more. The lawyer you choose plays a significant role in your case.
You’ll work with them for the next few months, and you must trust them, as they will provide you with the legal advice and assistance you need to file. So, you’ll need to feel comfortable with them and trust them.
Depending on how much time you put into it, it might take a couple of days or longer to find the one you want to use.
Initial Meeting With a Bankruptcy Lawyer
Once you find the lawyer you want to use, you can schedule an initial consultation with them. This meeting can help you learn the answers to your questions and discover more about the bankruptcy process.
Scheduling an appointment is simple, as you can call or do it online, but it might take a week or two before you meet with the lawyer. You can create a list of questions while waiting for the appointment.
You can learn a lot during this meeting. For example, you’ll learn more about Chapter 7 bankruptcy and how this branch can help you become debt-free.
You’ll also learn about Chapter 13 bankruptcy, the consequences of bankruptcy, and the costs. The lawyer will ask about your debt, income, job, and finances to determine which branch you can use.
While there are two main types of bankruptcy, you might be eligible for only one. When you leave the appointment, the lawyer will give you a list of documents to gather that you’ll need if you decide to file.
Follow-Up Meeting With a Lawyer
After learning about your options and the branch you should use, you can decide if you want to file for bankruptcy. If you decide to file, you can schedule a follow-up meeting with the lawyer.
The follow-up meeting helps the lawyer determine if you qualify for Chapter 7, if this is the branch the lawyer suggests. Lawyers determine this by completing an income-based test.
The test determines if your income qualifies you to use Chapter 7. If you fail the test, you can only use Chapter 13. Your lawyer needs income documentation to conduct this test.
If you’d like to speed up your case, you should decide right away if you want to file and schedule this appointment quickly. You’ll also need to work on gathering the documents the law firm needs to initiate your bankruptcy case.
Gather Up Your Documents
One of the steps that might take some time is gathering up your documents. The bankruptcy process requires a lot of documentation, and your lawyer will give you a list of what you need.
Here are some of the documents your lawyer will ask for:
- Current pay stubs
- Bank statements
- Tax returns from the past two years
- Documents providing assets
- Bank account information
- Debt statements
- Documents proving asset values
When you supply these things to your lawyer, they can begin working on your paperwork. A Chapter 7 case requires submitting numerous documents to the court.
When the lawyer completes the documents, you’ll need to sign them before they file them with the court. Your bankruptcy case begins the legal process once the lawyer files them.
Determine How to Pay for It
Another vital step you must complete before your lawyer files your case is paying for the services. Bankruptcy requires several fees.
The first fee is for the court filing costs. Every court requires paying fees to file a bankruptcy case.
The other fee is for your legal services. Your lawyer must complete many steps and efforts to file your case. Therefore, you must pay the legal fees they charge.
Most lawyers won’t file bankruptcy cases until the client pays the fees in full. However, if you can’t afford to pay the fees, you can ask the lawyer about a payment plan.
Some law firms allow this, but most won’t file a case until the client completes the payment plan in full.
File the Documents
At this point, the lawyer should have everything they need to file your case. It may be several weeks or months since you initially started working on your case, but you won’t have much more to do at this point.
Your lawyer will file the documents and wait for the court to respond. The court will respond in several ways, including issuing an automatic stay.
This stay orders all your creditors to stop their collection efforts. You shouldn’t receive any phone calls, emails, texts, or letters in the mail after the court issues this order.
Attend the 341 Meeting of the Creditors
The court will also respond by scheduling a court hearing for your case. They call this a 341 meeting of the creditors, and you must attend this hearing. Your attorney will also be there.
The court generally schedules this meeting within several weeks of receiving your bankruptcy documents. The meeting generally lasts about one hour and is vital for your case.
The bankruptcy court assigns a trustee to your case. A trustee is a court-appointed official that is responsible for reviewing every detail of your case. The trustee holds the fate of your case in his or her hands.
You must take an oath at this meeting and sit before the trustee. The trustee will ask many questions about your case. The goal is for the trustee to acquire the information needed to begin processing your case.
If you’re using Chapter 7, this will likely be the only court hearing you must attend. However, this court hearing doesn’t finalize your case. Instead, it simply gives the trustee the information needed to begin your case.
Follow Through With Any Requests
As the trustee begins evaluating the facts from your case, they might experience times when they need more information.
For example, if you sold a vehicle in the past few months, they might ask for documentation from this sale. Trustees can ask for many types of evidence and documents related to your financial state.
The trustee will make these requests to your lawyer, and your lawyer will ask you to gather the necessary documents. When you submit them to your attorney, your attorney passes them on to the court.
Wait for the Court to Process Your Case
It takes time for a trustee to process a case, especially if you have any complex issues. If everything checks out, the trustee will approve the case and offer a discharge.
A discharge releases your financial obligations to your creditors, and your documents will show which debts received a discharge.
It generally takes several months to receive a discharge from the date you file your case. You can speed up the process by complying with the trustee’s requests in a timely manner.
Receiving the discharge closes your case, allowing you to move on with financial freedom.
Start Your Case Today by Contacting Our Firm
Filing for bankruptcy is a process that takes time and work. Your first step is to find a good bankruptcy lawyer to assist with your filing. Next, you must follow the steps the lawyer advises.
It might take six months or longer to complete a Chapter 7 bankruptcy case, but it will be worthwhile if you have a lot of debt.If you’re interested in learning more about bankruptcy, contact us. We can help you learn more about your options and we’ll assist you with filing all the necessary documents when you’re ready to file.