Bankruptcy Timeline
Below is a bankruptcy timeline of
some typical events in a bankruptcy
filing in Michigan. To further discuss
any of these issues, please
contact me, bankruptcy lawyer Walter
Metzen today to schedule your free
initial consultation.
Click here to see a Chapter 7 Bankruptcy
Timeline under the "New Bankruptcy Law"
6 Years Prior
- Bankruptcy Prevents
Filing of Chapter 7
You are prohibited from receiving a
discharge under Chapter 7 if you
received a discharge in a bankruptcy
which was filed within the last 6 years.
A discharge may still be granted if the
prior bankruptcy was under Chapter 12 or
13 and paid 100% of allowed unsecured
claims, or paid at least 70% allowed
unsecured claims and the plan was
proposed in good faith and was the your
best effort. This restriction does not
apply to the filing of a Chapter 13
after any prior bankruptcy.
1 Year Prior
- Transfer, concealment or
destruction of property prevents
discharge in Chapter 7
The court may deny you discharge of
all debt if you attempted to hinder,
delay or defraud a creditor when you
transferred, removed, destroyed,
mutilated, or concealed property within
one year prior to the filing of your
Chapter 7 petition. The trustee may
recover the property from the person to
whom you transferred it.
- Payment to Relative or
Insider is a Preference
A total of $600 or more in money or
property which is paid to a creditor
that is a relative or insider (certain
business associates) within a year prior
to filing is a preference. The Trustee
may recover preferences and divide the
money between all creditors. In Chapter
13, you may be able to prevent the
trustee from going after the relative by
increasing the amount paid into your
plan.
180 Days prior
- Dismissal of prior
bankruptcy prevents filing Chapter 7
or 13
You may not file any bankruptcy if
you filed a previous bankruptcy which
was dismissed in the preceding 180 days
either (1) on the court's order because
of your willful failure to obey orders
of the court or to appear in court when
required; or (2) at your request after
the filing of a request for relief from
the automatic stay.
90 days prior
- Minimum residency
requirement.
You must be a resident in the state
in which you are filing for the last 90
days. If you have not resided in the
state that long, you can only file in
the state where you have resided, or
which has been your principal place of
business or which has been the location
of your principal assets for the
majority of the last 180 days.
- Payment to Creditor is a
Preference
A total of $600 or more in money or
property which is paid to a creditor
within 90 days prior to filing is a
preference. The Trustee may recover
preferences and divide the money between
all creditors. In Chapter 13, you may be
able to prevent the trustee from going
after the creditor by increasing the
amount paid into your plan
60 Days Prior
- Debt presumed to be
non-dischargeable
Debt of $1,075 for cash advances or
"luxury goods or services" incurred
within 60 days before the Bankruptcy is
filed is presumed to be
non-dischargeable. Applies to Chapter 7
cases, and to hardship discharge in
Chapter 13.
BANKRUPTCY FILED
A voluntary bankruptcy is commenced
when you file a petition with the
Bankruptcy Court requesting protection
from your creditors under Chapter 7 or
Chapter 13. A husband and wife may file
one petition together and commence a
joint case. The filing also puts a stay
into effect prohibiting collection
actions.
15 Days After
- Deadline to File
Schedules and Financial Statement,
and Chapter 13 Plan
Within 15 days after filing the
Chapter 7 or Chapter 13 petition that
commenced your case, you must file
schedules listing your assets and
liabilities, your current income and
expenditures, executory contracts and
unexpired leases, and a statement of
your financial affairs. In Chapter 13,
the Plan must also be filed within 15
days after the Bankruptcy was filed. The
plan provides for submission of future
income and the treatment of your
creditors, specifying when and how much
each kind of creditor will receive.
18 Days After
- Court Mails Notice
of Commencement of Case
Approximately 18 days after your case
is commenced, the court mails a
Notice of Commencement of Case to
you and to the creditors you have
included in your mailing list. The
notice contains meeting date, deadlines
for objections to discharge and for
filing Proofs of Claims. You can call
the court's Automated Information Line
to get the meeting date even before the
notice is mailed.
After Chapter 13 Plan Filed
- Chapter 13 only:
Deadline to Notice Chapter 13
Plan
In the Eastern District of Michigan,
your attorney must mail your Chapter 13
Plan to all creditors after the Chapter
13 Plan is filed.
30 Days After
- Chapter 7 only: Deadline
to file Statement of Intention
Within 30 days after filing the
Chapter 7 petition that commenced your
case (or before the § 341 meeting if
that is earlier), you must file a
Statement of Intention indicating
whether you will be surrendering or
keeping property secured by consumer
debt. If you are keeping secured
property, you will need to indicate
whether you intend to: (1) reaffirm the
debt and continue to make the payments
remaining obligated for the balance of
the debt, or (2) redeem the property by
immediately paying the value of the
property and receive a discharge for the
balance of the debt. A copy of the
Statement of Intention must be
served on the trustee and the creditors
named in the statement on or before the
filing of the statement.
30 Days after Chapter 13 Plan
Filed
- Chapter 13 only: First
Payment Due Under Chapter 13
Plan
You must make your first payment
under the Chapter 13 Plan
within 30 days after the plan was filed.
If your plan was filed with the petition
which commences your case, your first
payment is due within 30 days of the
start of the case. Since the plan must
be filed within 15 days after the
commencement of your case, the latest
date you may start making payments is 45
days after the filing of the case.
6 Weeks After
Section 341 (the symbol "§" means
section) of the Bankruptcy code requires
the Trustee to preside at a meeting
of creditors within a "reasonable
time.” This meeting is usually held
approximately six weeks after Bankruptcy
is filed. Immediately after the case is
filed, you can call the court's
Automated Information Line to get
the meeting date and time. You (as the
debtor in a Bankruptcy case) are
required to attend this meeting and
testify under oath, but most creditors
do not come to the meeting. The failure
of creditors to attend the meeting does
not affect their right to challenge the
discharge in a Chapter 7 or to object to
the plan in a Chapter 13. If you do not
attend, your case will be dismissed.
45 Days after Statement of
Intention Filed
Chapter 7: Deadline in Chapter 7 to
perform under Statement of Intention
- In Chapter 7, within 45 days
after you filed Statement of
Intention, you are to perform
as you indicated. In that statement,
you were required to state whether
you would be surrendering or keeping
property secured by consumer debt.
If you were keeping secured
property, you would have indicated
whether you intended to: (1)
reaffirm the debt and continue to
make the payments remaining
obligated for the balance of the
debt, or (2) redeem the property by
immediately paying the value of the
property and receiving a discharge
for the balance of the debt.
30 Days After § 341 Meeting
- Deadline for creditors
or Trustee to object to claim of
exempt property
Creditors and the Trustee have until
30 days after the conclusion of
the creditor's meeting under § 341 to
object to the property you have claimed
as exempt in Schedule C. While most §
341 meetings are concluded on the same
day they are set, it is not unusual for
a meeting to be continued to a
subsequent date, which will extend the
time that creditors have to object.
60 Days After a § 341 Meeting
- Chapter 7: Deadline in
Chapter 7 for objection to discharge
of a particular debt under §523(c)
Creditors have until 60 days after
the first date set for creditor's
meeting under § 341 to file a complaint
under § 523(c). § 523(c) allows
creditors to object to the discharge of
debts which were obtained by false
pretenses, a false representation, or
actual fraud; debt from fraud or
defalcation while acting in a fiduciary
capacity, embezzlement or larceny; debt
for willful and malicious injury; and
debt incurred in a divorce or separation
(other than child support and spousal
maintenance which are not discharged
even without an objection to discharge).
The most common objection to discharge
of a debt is based on § 523(a) (2). This
section presumes that charges totaling
$1,000 or more to one creditor within 60
days before the case is commenced are
not discharged, if they are for luxury
goods or services, or cash advances.
This section also denies a discharge to
debt extended because the creditor
relied upon a credit application which
was materially false.
- Chapter 7: Deadline for
objection to discharge of all debt
under §727(a)
Creditors have until 60 days after
the first date set for creditor's
meeting under § 341 to file a complaint
under § 727(a). § 727(a) allows object
to the discharge of all debts because of
misconduct including transfer,
destruction or concealment of property;
concealment, destruction, falsification
or failure to keep financial records;
making false statements; withholding
information; failing to explain losses;
failure to respond to material
questions; having received a discharge
in a prior case filed within the last 6
years.
- Chapter 7: Deadline for
U.S. Trustee or court to move to
dismiss case for substantial abuse
under §707(b)
Until 60 days after the first date
set for creditor's meeting under § 341,
the U.S. Trustee or the court may move
to dismiss a case in which debts are
primarily consumer debts if it finds
that the granting of relief would be a
substantial abuse of the provisions of
Chapter 7. Substantial abuse has been
interpreted by a number of courts to
mean having sufficient disposable income
to pay more than half of your unsecured
debt over the next 36 months.
- Chapter 13: Deadline in
Chapter 13 to file all due but
unfiled tax returns
For cases filed in the Eastern
District of Michigan, you must file all
due but unfiled tax returns within 60
days after the first date set for the
§ 341 Meeting.
More Than 60 Days After a § 341
Meeting
- Discharge entered in
Chapter 7 case
Court rules require that the
discharge be entered "forthwith" after
the expiration of the time for objecting
to discharge or moving to dismiss the
case. The time for those objections
expires 60 days after the first date set
for creditor's meeting.
The discharge is not absolute or
final. The trustee can ask that the
discharge be set aside if you do not
turn over non-exempt property, and for
other violations of the debtor's duties.
90 Days After a § 341 Meeting
- Deadline for
non-government creditor to file its
Proof of Claim
A creditor, other than a governmental
unit, must file its Proof of Claim
within 90 days after the after the first
date set for creditor's meeting under §
341 in order to share in payments from
the estate.
180 Days after a Bankruptcy
Filing
- Deadline for
governmental unit to file Proof of
Claim
A governmental unit, such as the
Internal Revenue Service, must file its
Proof of Claim within the
commencement of the case in order to
share in payments from the estate.
3 Years from First Payment Plan
- Minimum length of
payments under Chapter 13 Plan
Unless all allowed claims are paid
sooner, plan payments must continue for
the three-year period beginning on the
date that the first payment is due under
the plan. During this period, the plan
must provide that all of the debtor's
projected disposable income is committed
to the plan. (This requirement comes
into effect only if the trustee or the
holder of an allowed unsecured claim
objects; it has been our experience that
the trustee will always object.)
- Discharge entered in
Chapter 13
Upon completion of plan payments the
discharge in Chapter 13 is entered.
5 Years from First Payment Plan
- Maximum length of
payments under Chapter 13 Plan
The maximum length of a Chapter 13
plan is five years beginning on the date
that the first payment is due under the
plan. After the third year of the plan,
the plan no longer needs to provide that
all of the disposable income be
committed to the plan.
- Discharge entered in
Chapter 13
Upon completion of plan payments the
discharge in Chapter 13 is entered. |
