The following timeline explains generally what happens before, during, and after a Chapter 7 bankruptcy. Your case might be different, especially if you've filed for bankruptcy before. If this is the case, you should talk to a lawyer before you file the bankruptcy case.

A Chapter 13 bankruptcy is similar, except for the fact that you will enter a payment plan to pay off your debts. The payment plan will last 3-5 years. If your current monthly income is less than the state median income for the same household size, the plan will be for 3 years. If your current monthly income is more than the state median, the plan will be for 5 years.

See our information about qualifying for bankruptcy.

Two years before filing bankruptcy

If you try to delay or defraud creditors by transferring, hiding, or destroying property within the two years before the bankruptcy, the court can:

• Deny the Chapter 7 discharge, and
• Give the transferred property to the other creditors.

One year before filing bankruptcy

You can't pay back a relative, friend or close business associate within the one year before filing for bankruptcy. If this happens, the court can take back the payment from your relative, friend or close business associate and give the money to other creditors.

If you had a prior bankruptcy case dismissed within one year of the time you filed a new bankruptcy case, the automatic stay entered in the new case will be terminated within 30 days. The only way to avoid this is to show that the Chapter 7 bankruptcy case was filed in good faith.

180 days before filing bankruptcy

You must wait 180 days to file a new bankruptcy case if a previous bankruptcy case was dismissed for one of the following reasons:

• You failed to follow a court order, or
• You requested a dismissal (following a party filing a motion seeking to lift the automatic stay).

Also, within 180 days before filing bankruptcy, you must receive credit counseling from an approved credit counseling agency. A list of federally approved credit counseling agencies can be found on the US Trustee's website.

90 days before filing bankruptcy

You must be a resident of Illinois for at least 90 days before filing for bankruptcy here.

Also, if you pay any creditor within 90 days before filing for bankruptcy, the trustee can seek to take that money back from the recipient to distribute to other creditors (as a "preferential" transfer).

New credit of $800 or more for luxury goods or services may not be discharged in bankruptcy if you got it within 90 days before filing. Also, a cash advance of $1,100 or more may not be discharged if you got it within 70 days before filing.

The bankruptcy case is filed

When a debtor files a bankruptcy petition, three things happen at the same time:

• The bankruptcy estate is created,
• The automatic stay goes into effect, and
• A trustee is appointed.

Bankruptcy estate

The bankruptcy estate is created the moment you file for bankruptcy. It's made up of all of the non-exempt property you own at the time. Non-exempt property is any property that you are not allowed to keep after bankruptcy. Exempt property is property that you need to maintain a job and household, and is determined by the state you live in. The bankruptcy estate includes property that is not in your possession, that you have recently given away, and that you are entitled to but have not yet received. The trustee assumes control of the property of the estate, and will sell it and use the proceeds to pay your creditors.

Automatic stay 

The automatic stay goes into effect as soon as you file for bankruptcy as long as you have not had a prior bankruptcy dismissed in the last year. If you had a prior bankruptcy dismissed within the last year, you should talk to a bankruptcy attorney about your options.

The automatic stay means that all collection activity by creditors or collection agencies must stop. The automatic stay is broad, and applies to most actions against a debtor and the debtor's property. Lawsuits to collect money or to foreclose on the property are frozen and can't continue.

If a creditor still tries to collect a debt, you may be able to sue them.

There are some exceptions to the automatic stay. The stay does not apply to, among other things:

• Criminal proceedings,
• Child support lawsuits,
• Paternity lawsuits, and
• Divorce proceedings (except with respect to dividing assets).

A government agency can still make you obey the law (for example, to clean up property that is a safety hazard).

Creditors can ask the bankruptcy judge to lift the automatic stay, and may be entitled to in some situations. Talk to a lawyer if a creditor tries to lift the automatic stay.

Appointment of the Chapter 7 trustee

A trustee is appointed the moment you file for bankruptcy. The trustee manages the case. The trustee reviews the petition makes sure it is complete and then schedules a meeting of creditors. The trustee also gathers the property of the estate, sells it at a public auction, and gives the money to creditors. Trustees are also appointed in Chapter 13 bankruptcy cases, but the trustee's primary role in those cases is to receive payments from the debtor under a Chapter 13 plan and distribute those payments to the debtor's creditors.

14 days after the case is filed

You have 14 days after you file your petition to file the following financial schedules with the court:

• Documents declaring your assets,
• Liabilities,
• Expenses,
• Income, and
• A statement of your affairs.

Depending on whether you file bankruptcy under chapter 7 or chapter 13, there are additional forms you need to file. If you do not file these documents, the judge may dismiss your bankruptcy case. You may not receive a discharge of a debt that you do not include in your papers.

Also, within 14 days after you file your case, the court will mail the Notice of Commencement of Case to you and all of the creditors listed in the petition. This notice will give the date for the meeting of creditors, and the deadlines for the creditors to object to the case and file their claims against you.

21-40 days after the case is filed

The court will hold the meeting of creditors between 21 and 40 days after the Chapter 7 bankruptcy case is filed, and between 21 and 50 days after a Chapter 13 bankruptcy case is filed. You will have at least 21 days' notice of when the meeting will take place. The trustee is in charge of the meeting of creditors.

At least 7 days before this meeting, you must provide the trustee with a copy of your most recently filed tax return. You must also provide 60 days worth of paystubs from all sources of income (including unemployment payments and retirement deposits). You also have to give a copy of these documents to any creditor that requests it. If you don't, the court may dismiss your case.

You must attend this meeting and bring a photo ID and social security card (or a written statement that such documentation does not exist) with you. You will be asked under oath about the statements in your petition.

Most of the creditors will likely not attend the meeting, and there will be no judge. The meeting is very informal, and in most cases will last no more than 10 minutes. If you don't attend the meeting, the case is dismissed and you will not receive a discharge of your debts.

About 30 days after the case is filed

If you have any debt that is secured by property (e.g., a car) or you have leased personal property and the lease has not expired, you must file a Statement of Intention within 30 days after filing the bankruptcy petition or before the meeting of creditors (whichever is sooner). In this document, you will tell the court one of two things:

• You want to keep any property that serves as collateral for your debts, or
• You want to give the property to the creditors.

If you want to keep the property, you have two options.

• Reaffirm the debt and continue making all payments on the debt, as long as you are confident you can repay the debt. Reaffirming the debt means you agree to pay the debt, even though it could be discharged or wiped out in the bankruptcy. Reaffirming the debt allows you to keep the property, but you must sign an agreement with the creditor that you will continue to pay the debt after your bankruptcy. You may reaffirm the debt in full on its original terms, or you and the creditor may agree to change the terms.
• Redeem the property by paying the fair market value for it or the amount of the creditor's claim (whichever is less), as long as certain conditions apply. Redeeming property allows you to keep the property by paying the creditor the fair market value. If you owe more than the property is worth, the amount you owe is lowered to the fair market value. Usually, you have to redeem in a single payment, so you have to pay the entire price at one time.

You must tell the court which option you choose in the Statement of Intention. You must also serve a copy of the statement on the bankruptcy trustee and all creditors named in the statement when filing it with the court.

If you do not timely file this statement, the court may terminate the automatic stay to allow a creditor to exercise remedies with respect to your property.

30 days after the meeting of creditors

You have 30 days after the meeting of creditors (unless the court extends the deadline) to perform your intention stated in the Statement of Intention (i.e., either keep the property (and reaffirm the debt or redeem the property), or give the property to creditors).

Additionally, the trustee and creditors generally have 30 days after the meeting of creditors to object to your exemption claims. The most common objections to exemptions are that the exemption law does not cover the type of property the debtor seeks to protect, or the property is worth more than the amount the debtor listed in the petition.

60 days after the meeting of creditors

Creditors have 60 days after the meeting of creditors to object to the discharge of any of the debts listed in the petition and schedules.

Creditors can object to your request to discharge a debt if the debt happened because of:

• Fraud,
• Stealing, or
• A divorce or separation, not including debts for child support and maintenance.

Also, parties (including creditors, the Chapter 7 trustee, and the U.S. Trustee) can object to the discharge of all debts if you have done any of the following:

• Concealed or destroyed property or financial records,
• Made false statements,
• Withheld information,
• Failed to explain losses,
• Failed to answer questions, or
• Received a discharge in Chapter 7 prior case filed within 8 years, or a discharge in a Chapter 13 case filed within 6 years, from the date the current Chapter 7 case was filed.

An objection to discharge starts a lawsuit called an "adversary proceeding." If there are no objections, you can expect to receive your Chapter 7 discharge a few months after the meeting of creditors.

Even if you get a discharge, the case is not officially closed. The trustee may move to set it aside if you obtained the discharge through fraud, did not turn over nonexempt property, or if you commit other bankruptcy violations.

Finally, to get the discharge, you must take a course about personal financial management. Unless the provider of the personal financial management course notifies the court, you must file with the court a statement that you completed the course within 60 days after the meeting of creditors.

70-180 days after the case is filed

In a voluntary Chapter 7 case, all of the creditors generally must file their proofs of claim within 70 days of the case being filed. Proofs of claim are documents the creditors submit to the court that say how much money the debtor owes them. If a creditor fails to file a proof of claim, the debtor or trustee may file a proof of claim on their behalf within 30 days of the deadline passing.

One exception is for government entities, like the IRS, that have claims against you, which have 180 days after the filing of the case to submit their proofs of claim.