It’s one of the most common—and important—questions New York bankruptcy debtors ask: How long will a chapter 7 bankruptcy take? The answer is there are really two timelines to be aware of: the one between the bankruptcy case being filed and the discharge, and the one from filing until closure.
In most cases, the period between the meeting of the creditors or the “341 meeting” and the discharge is sixty days. Because the 341 meeting must occur no fewer than 21 days and no more than 40 days after filing, a chapter 7 case can take about 90 days, or three months, until discharge. This is especially true for no-income, no-asset bankruptcies
If one of the creditors files an objection to the discharge of any debts, or the trustee or anyone else initiates an adversary proceeding against the debtor, then the timeline to discharge will increase depending on the seriousness of the issues. If any appeals ensue, the case can go on much, much longer, but it can be worth it if an appellate body rules that a debtor’s debt is dischargeable.
The time period between filing and the case’s closure will also depend on the complexity of the debtor’s situation. When the bankruptcy is coupled with a business bankruptcy, then debtors can reasonably expect it to go on longer as well. Cases with assets can also take more time as the trustee will need to gather the debtor’s nonexempt assets into the bankruptcy estate, liquidate them, and then pay off the creditors. It can take years to sell assets that are valuable but not always easy to sell, like business property or real estate, depending on market conditions.
More on what happens between discharge and case closure here.
One thing chapter 7 debtors can do to expedite their cases is properly protect their assets with exemptions or sign reaffirmation agreements with lenders to keep their property. Often this can leave the bankruptcy estate with no real assets to be distributed, leaving little for the trustee to liquidate for unsecured creditors.
Unrelated to discharge, many debtors will file chapter 7 cases principally for the benefit of the automatic stay to stop a foreclosure. Because these types of bankruptcies tend not to result in discharges, they usually end more quickly because the debtor resolves any outstanding mortgage issues with the lender and then dismisses the case.
No income, no asset cases usually feature very few variations, but once nonexempt assets or unusual debts like priority claims are involved, a chapter 7 case will take longer to resolve. Regardless of how you’d describe your situation, an experienced New York bankruptcy lawyer will conscientiously take care of your case.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Chapter 7 Bankruptcy Lawyer Brooklyn NY Bruce Weiner for a free initial consultation.