How does bankruptcy work?

Your bankruptcy case will begin with the filing of your petition and schedules with the United States Bankruptcy Court, a division of the US District Court.

Upon filing, the Court enters an order called the Automatic Stay which requires your creditors to stop all collection activity. Bankruptcy stops foreclosures, repossessions, lawsuits, phone calls and letters.

Approximately 30 days from the date of filing, you will be required to attend the section 341(a) Meeting of Creditors. It is here that you will meet with the Trustee assigned to your case.

Once the Trustee has concluded the meeting, Chapter 7 debtors are done. They must wait for all deadlines to run before the discharge order is entered and the case is closed, but their involvement is complete. Chapter 7 bankruptcy takes 3-5 months from filing to discharge.

Chapter 13 debtors remain protected by the Court while they make their payments. Upon the debtor’s successful completion of the payment plan, the Court will enter the discharge order and close the case. Chapter 13 bankruptcy takes 3-5 years.