Illinois Bankruptcy Timeline

Day 1 Bankruptcy Filed

Commencement of Case

A voluntary Will County, Illinois bankruptcy case is commenced by filing a Petition with the Bankruptcy Court. A husband and wife may file one petition together and commence a joint case. A schedule of assets and liabilities, a schedule of current income and expenditures, a schedule of executory contracts and unexpired leases, and a statement of financial affairs must be filed with the Illinois Bankruptcy Court.

About 1 Week after Bankruptcy Filed

Court Mails a Notice of Bankruptcy Filing

Approximately 1 week after the bankruptcy is filed, the court mails a Notice of Commencement of Case to the debtor and to the creditors included in the list of creditors. The notice contains the date and time of your court hearing (called “meeting of creditors”), deadlines for objections to discharge and the name of the Northern Illinois District bankruptcy trustee appointed to oversee your case.

30 Days after Illinois Bankruptcy Filed

Chapter 7: Statement of Intention regarding secured debt must be filed

Within 30 days after a Chapter 7 has been filed (or before the § 341 meeting if that is earlier), the debtor must file a Statement of Intention regarding his or her secured debts, e.g. home mortgages, auto loans, etc.. That statement indicates whether the debtor intends to: (1) reaffirm the debt and continue making payments, (2) redeem the property by immediately paying the value of the property, or (3) surrender the property.

Before Meeting of Creditors

Provide copies of tax returns

Not later than 7 days before the date first set for the first meeting of creditors, the debtor shall provide a copy of his or her most recent federal and state income tax return to the Illinois bankruptcy trustee and to any creditors that have requested it

About 4-6 Weeks after Bankruptcy Filed

§ 341 Meeting (Creditor’s Meeting)

A Meeting of Creditors (also known as “Section 341 Hearing”) is usually held approximately four to six weeks after Bankruptcy is filed. The date and time of this meeting is stated in the Notice of Commencement of Case mailed by the court. Each debtor is required to attend this meeting and testify under oath, but most creditors do not come to the meeting.

30 Days after Meeting of Creditors

Deadline to file objection to claim of exemption

The debtor’s property must be claimed as exempt under the law in order to protect it from creditors. If the Trustee or a creditor disputes the debtor’s exemptions, they must file an objection within 30 days after the 341 meeting. Note: If the case has been properly prepared this type of objection should rarely occur.

Chapter 7: Debtor must perform under the Statement of Intention

In Chapter 7, the debtor must perform under the Statement of Intention, and (1) reaffirm the secured debt and continue to make the payments remaining for the balance of the debt, (2) redeem the property by immediately paying the value of the property, or (3) surrendering the property. [Note: Another section of the bankruptcy code appears to specify a time of 45 days after the meeting for the same action. See 11 U.S.C. § 521(a)(2)(B); and 11 U.S.C. § 521(a)(6) ]

60 Days after Meeting of Creditors

Deadline for Creditors to Object to Discharge of a Debt

Creditors have 60 days after the meeting of creditors to file a complaint objecting 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; and debt for willful and malicious injury. This deadline applies to objections to discharge of: Consumer debts owed to a single creditor of more than $500 for luxury goods or services obtained within 90 days before a Chapter 7 bankruptcy.

Deadline for Creditors to Object to Discharge of all Debts

Creditors have 60 days after the first date set for 341 meeting to file a complaint objecting 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.

More than 60 Days after Meeting of Creditors

Discharge Order entered

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 the debtor does not turn over non-exempt property, if the debtor fails to perform other duties, or if there were other matters pending which would result in the denial of the discharge.

Final Decree

Your case is not actually closed until the court issues a Final Decree. The “Discharge Order” and the “Final Decree” don’t necessarily come at the same time, although they often do if a case is a “no-asset” case. A no-asset case is a case where all of the debtor’s property is exempt.

However, if there is some property that is not exempt, then the bankruptcy case will remain open as long as it takes for the Trustee to liquidate the non-exempt property, distribute the funds to creditors, and file a final report. When the Final Decree is issued the case is closed.

As a practical matter once the discharge is entered a few months after filing the debtor is able to move forward with his or her life. Even if the trustee has additional duties to complete before he files a final report, this does not usually affect the debtor.

Please call Hamilton & Antonsen, Ltd. at 815.729.9220 for more information or to file an Illinois Chapter 7 bankruptcy case.