There are about a dozen steps in a typical Chapter 7 Bankruptcy case. The entire process takes approximately three to six months from initial consultation to discharge.
- Initial Consultation with Attorney.
- Client gathers all required financial and other documents;
- Client takes online Credit Counseling Class;
- Attorney prepares the Voluntary Petition, Schedules & other legal documents;
- Client reviews and approves the legal documents;
- Attorney files the case electronically with the U.S. Bankruptcy Court;
- The Bankruptcy Court issues a series of standing orders including “Duties of Debtor” and the “Automatic Stay” and schedules a 341 “Meeting of Creditors”;
- Meeting of Creditors takes place in Anchorage with Trustee presiding;
- If needed, Reaffirmation agreement(s) are prepared and filed by the parties;
- The Court (in some cases) schedules a Reaffirmation hearing for the Judge to approve the agreement(s);
- Client takes online Financial Management course;
- Discharge is issued by the Court.
A Chapter 13 Bankruptcy case has the same steps as above but there is also a Reorganization Plan Confirmation hearing in front of the Judge. If the plan is approved, the Petitioner/Debtor must make monthly payment to the Trustee for three or five years. The Trustee distributes the payment money to creditors. Upon the conclusion of the plan term, certain remaining debt is discharged.
When there are assets that need to be distributed and when motions are filed by the Trustee or creditors, cases are more complicated and may take longer to finalize.
Sometimes, an Adversary Action is filed. This is a separate lawsuit based on the original bankruptcy case. This type of action is often brought to determine dischargeability of a debt or to recover property transferred by the debtor shortly before filing for bankruptcy.