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What Happens After Filing Chapter 7 Bankruptcy?

by Karl Pearson • February 25, 2021

Most people never anticipate or assume that they will one day file bankruptcy. However, because of the COVID-19 crisis, more and more people are accepting the reality of their financial situation and realizing that they need help. Many of these people will make the difficult decision to file for Chapter 7 bankruptcy. Essentially, a Chapter 7 bankruptcy liquidates all of your non-exempt assets to pay off the debt you owe creditors. Examples of debt you can discharge by filing Chapter 7 bankruptcy include:
  • Medical bills
  • Credit card debt
  • Personal loans
  • Older taxes
While filing for Chapter 7 bankruptcy may feel like a herculean task, an experienced bankruptcy attorney can make the process much simpler. You should always work with an experienced and qualified bankruptcy attorney in Scottsdale, Arizona to guide you throughout the entire process. Below, we answer the following question: What happens after filing Chapter 7 bankruptcy?

Chapter 7 Bankruptcy Process

The average Chapter 7 bankruptcy filing lasts between four-to-six months. While most cases do not require a court appearance, you will be required to attend a Meeting of Creditors where the Trustee will ask you questions about your case. Once this process is complete, the Court will enter a Discharge Order which will discharge most or all of your debts. Here are the steps involved in the typical Chapter 7 bankruptcy filing.

Eligibility for Chapter 7 Bankruptcy

An experienced bankruptcy attorney can help you determine whether you are eligible for Chapter 7 bankruptcy. If you make less than the Median Income for the state where you reside, you will ordinarily qualify to file a Chapter 7 Bankruptcy. If you make more than the Median Income, you may be able to file if you pass a Means Test which takes into account certain expenses.

Pre-Bankruptcy Credit Counseling

If you decide to file Chapter 7 bankruptcy,  you must undergo credit counseling from an approved agency. This must happen within six months prior to filing.

Bankruptcy Petition

When filing a Chapter 7 bankruptcy, you must complete many forms that list your income, expenses, assets, debts and exemptions. A bankruptcy attorney can help you prepare the bankruptcy Petition and decide what you should include on the Schedules.

Automatic Stay

Immediately upon filing a bankruptcy petition, an automatic stay will go into effect. Essentially, an automatic stay provides temporary protection while the bankruptcy process is sorted out. Creditors are unable to continue collecting from the debtor when an automatic stay is in place.

Assignment of a Bankruptcy Trustee

After filing a bankruptcy petition, the court will appoint a bankruptcy Trustee to administer your case. The Trustee is responsible for many tasks, including ensuring your paperwork is accurate and selling any non-exempt assets.

Meeting of Creditors

Most people never step foot inside a courtroom during the Chapter 7 bankruptcy process. Instead, they attend a meeting of creditors hearing given by the bankruptcy Trustee. During the meeting, you will provide proof of your identification and answer questions about your bankruptcy filing.

Financial Management Course

Before you can receive a bankruptcy discharge, you must complete a financial management course.. The purpose of the debtor education course is to show you how to manage your money and use credit wisely after bankruptcy.


A discharge in Chapter 7 bankruptcy generally occurs around four-to-six months after the date you filed your petition with the clerk of the bankruptcy court. From this point on, the automatic stay is lifted and you are no longer financially responsible for any discharged debts.

Bankruptcy Case Closure

Despite receiving a discharge, your bankruptcy case may still remain “open” for a period of time. This can happen if there are non-exempt assets that need to be liquidated to pay creditors. If there are no assets, the court will typically close your case a few days or weeks after the granting of the discharge.

Consult With a Qualified Bankruptcy Attorney

Because bankruptcy is often an emotionally exhausting process, we advise that you work with a qualified bankruptcy attorney from the beginning. This especially applies during the coronavirus pandemic where emotions are already running extremely high.

Attorney Karl Pearson understands your rights and options under Chapter 7 bankruptcy and will help you secure the best deal possible. Contact him today at (480) 820-1800 to uncover your legal options. You can also fill out the online contact form on the Pearson Law website. Pearson Law is located in Scottsdale, Arizona and represents clients throughout Maricopa County and the surrounding areas. Call today if you are looking to successfully file for bankruptcy during COVID-19 with the help of an experienced and professional attorney.

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