How Long Does It Take For A Chapter 7 Bankruptcy To Discharge?

Bankruptcy is just a process. Everyone first wants to know how much it costs, and the answer is that the attorney’s fee varies based on the case. The filing fee for Chapter 7 is now $335. The Virginia State Bar has a new ethics opinion that says a Chapter 7 attorney should not file a case without first being paid in full. So, we have to be paid in full before you can file your case. People often ask, “What is your payment plan?” I will often respond, “Pay what you can when you can.” Some people get it paid off in a week. I have had many people hand me $250 and then they came back the next Monday with the rest of the money. They borrowed it from their mother or something like that. And then we have people who pay $50 a month and somewhere at the end of a year, they realize they have not gotten very far and they come up with the rest of the money. I have had people pay over a three year period. But once it is paid, we send the file to our paralegal and we have the petition prepared in anywhere from one to five days. The average is about three days. Then we have a signing.

After the signing, we file the bankruptcy electronically and the process then lasts 90 to 110 days. The timing depends on which court we file it in and when. There are actually seven courts in Virginia, with three ancillary courts for judge hearings and seven other places for holding “341 meetings”. Section 341 of the Bankruptcy Code allows your creditors to come to a meeting to ask questions. I always say that “they never show up; the only creditors that show up are ex-wives, ex-husbands, and ex-business partners.” The 341 meeting of creditors is held 30 to 35 days after we file the case. In Chapter 7 cases a “trustee” is appointed. A trustee is just another attorney who practices bankruptcy law, and his job is to look over your petition to make sure that there are no assets he can sell to pay creditors. He will ask you some routine questions for three to ten minutes.

We handle case all across Virginia, handling much of the case by telephone and internet. We like to say that “We bring legal services into your living room!”

At the end of that 90 to 110 day period you will receive a “discharge”, which is a forgiveness of all debts; all debts except for certain taxes, fines and restitution in a criminal case, child support and spousal support, and student loans. Then we send a letter to you that says, “Enclosed is the good news of your final discharge. All of the debts you’ve listed have indeed been discharged. This will end our representation of you in this matter.” And it does.

We have had countless people who have been happy at the end of the process. We have received so many testimonials that it would crowd our website to place them all there. Clients come to our office with gifts of flowers, plants and candy. They are overwhelmingly grateful. On Saint Patrick’s Day we always get a big pot of corned beef and cabbage. At Christmas, we always get tons of cookies. We have beautiful plants in our offices; almost all are gifts from our clients. Their lives have been turned around. We are a very touchy-feely law firm. We care about our clients. The caring shows and people feel very free to come and just visit with us, and boy do they! For years we had an office dog, and that was part of our ambiance. Unfortunately she had diabetes and we had to put her down just before last Thanksgiving. Clients still come to see us and ask, “Where is Noel?” We are very much a family operation.

Can I Ever Own A Home Or Car After A Bankruptcy?

We have a partner in California called 720 Credit Score. I do not know if you have heard of Phil Tyrone. He is the owner of 720 Credit Score. He’s just a wonderful guy. His belief is that everybody should have a 720 Credit Score. It’s actually very easy to get there. He offers an online class that he charges $1,000 for, that teaches steps to improve your credit score. The goal is 720. If anyone files their bankruptcy with our firm, they get to take that class for free. The class teaches you how to build your credit back to 720 in 12 to 24 months. It can happen.

Bank guidelines say that you cannot own a house for two years after you file a bankruptcy. So, you could actually pre-qualify for a loan and possibly go to closing two years and a day after you file bankruptcy. However, if you allow your house to go to foreclosure then typically you can’t buy a house for five years. These are bank guidelines.

We have had three clients who filed their Chapter 7 with me, and three months after they filed they bought a house. So, credit reporting agencies are pretty understanding about the circumstance of filing a bankruptcy.

When you take the online class, “7 Steps to a 720 Credit Score”, they teach you that filing a bankruptcy is the first step to obtaining a 720 credit score. That is just an awesome thing to be telling people because I cannot see a faster, easier way to getting your credit score back other than figuring out how to make a huge amount of money and pay it off by yourself.

In my experience, one person in a thousand does not need to file a bankruptcy. We had a lady who came to see us a year ago, and she could not stop crying. She was very well dressed, very elegant, but she was so upset that she thought she had to file because her husband had lost his job making $125,000 a year. I finally handed her the Kleenex and said, “Ma’am, you’re the one person in a thousand who doesn’t need to file a bankruptcy. You make $660,000 a year. My advice is that you should simply stop paying the $7,300 per month for your yacht. Let it go.” She got up, thanked me, and she stopped crying. She paid me for my time and walked out of the office smiling.

Can You Share Some Success Stories Of Your Clients?

My favorite story is when people buy a house. We also have three realtors who work in our office and we offer that we will be your realtor and help you find a house later on. Whether they use our services or not, we just love to see people buying a house. Sometimes I look in the mirror and I see a real estate agent because it is really such a happy experience to sell a house. It is such a happy experience to buy a house. Nationwide, the house market has become so good because it has finally normalized. The prices reflect the actual worth of houses. People are able to afford them because interest rates are so low and there has never been or going to be a better time to buy a house than right now. We get excited about people who come in to file a bankruptcy with the goal of buying a house, because it is actually very doable.

We also have so many people who let us know what a relief they’re experiencing now that they are no longer being hounded by their credit card companies and debt collectors. It’s a wonderful feeling for us too! We’ve seen people actually get healthier afterwards, and that has been a really good thing. We recommend avoiding fast food to save money and get healthier. Just eat fruits and vegetables!

For more information on Timeframe Of Discharge, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (540) 788-2273 today.

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