What happens when someone files bankruptcy in Indiana? In former blogs, I’ve emphasized how important it is for me, as an Indiana bankruptcy attorney, to design a strategy that fits each individual situation. However, there is a typical time line when a Chapter 7 bankruptcy is filed.

The process starts with the filing of the official petition with the Indiana bankruptcy court. A complete statement of financial affairs and other forms go along with this petition. Just as soon as this step is complete, almost all creditors are prevented from any collection activities. That is called the automatic stay.

Usually no longer than 20-40 days after the filing, the bankruptcy trustee appointed by the court will hold a first meeting of creditors. The person who filed bankruptcy attends that meeting and is asked questions by the trustee. This step takes only five or six minures in most routine bankruptcy cases.

The creditors then have the next 60 days to convince the courts that their debt should be excluded from the bankruptcy. The trustee will review the person’s assets, income, and expenses and see if there is enough money after living expenses to pay something on the debt.

For many people filing a Chapter 7 bankruptcy, the court will give them a discharge of some or all of the debt within four to five months after the filing date. During those months the trustee takes control of any property, sells whatever assets the person is not allowed to keep, and uses the money to pay creditors. Don’t worry, though. In almost all cases the debtors lose little to no property. In the meantime, any wages the bankrupt person earns after the filing are his or hers to keep towards living expenses.