Fortunately, most consumer debtors’ assets are fully exempt under state or federal law and no assets are sold. When there are no assets to sell, the chapter 7 case is usually short and lasts approximately 3 months.
Clients might consider a Chapter 7 Bankruptcy if he or she has mainly unsecured debts, is current on the secured debts he or she wants to keep, has not filed another chapter 7 in the last 8 years and meets the income requirements. A business that plans to close might consider filing Chapter 7 Bankruptcy. Often, the business will attempt to reorganize but will later convert to a chapter 7 if the reorganization is unsuccessful. After filing a Chapter 7, Debtors will attend a meeting of creditors with their attorney. This meeting will occur 30 to 45 days after filing. Although the meeting with the Chapter 7 Trustee is called a “Meeting of Creditors,” creditors are unlikely to attend. However, creditors and other parties have 60 days following the conclusion of the meeting to object to a debtor’s discharge. If no objection is made, the Court can enter an order of discharge.
For more information about Chapter 7 Bankruptcy, be sure to see our Chapter 7 eBook.