STEP SIX - CLOSING YOUR CASE AND GETTING A DISCHARGE
The time frames of Chapter 7 cases are usually a little different than Chapter 13 cases. Many Chapter 7 cases can be closed in 4-9 months whereas Chapter 13 cases often last for 3-5 years. Chapter 7 cases could remain open longer if there are issues of liquidation, backlogs with the court, or other matters in the case that the trustee is reviewing. Chapter 13 cases take longer because they are repayment plans, and are structured in a time frame that allows the debtor to accomplish what is needed in their plan within the time constraints of the law.
After the filing of your petition and schedules, you will need to complete a second credit counseling course often referred to as the Debtor’s Education Course. You should complete that immediately after filing. You will have to have filed it before the close of your case, and before you obtain a discharge. If you do not complete that course, you will not receive a discharge.
It is important to remember that each case is different, and I cannot provide any predictions or guarantees in any case. The following time frames are estimates.
CHAPTER 7 TIME FRAMES
After the meeting of creditors is concluded the trustee will determine if the case is an asset case (where assets will be distributed) or a no asset case. Within 60 days the trustee will either have determined that the case was an asset case or a non-asset case. If the case is a non-asset case they will file a Notice of No Distribution. This notifies all parties that there are no assets to be distributed. If the case is an asset case then the trustee will file a Notice to File Claims. This notifies creditors to file a claim in your case for how much they believe that they are owed. They will be paid according to statute from the funds obtained from your asset(s). In many cases the Notice of No Distribution is filed right away, and you will receive the filed notice within about 1 to 2 weeks after your court hearing.
Once that step is completed, the trustee will file her Final Report regarding whether or not assets were obtained and distributed.
Creditors are given a 90 day window to object to the discharge from the date you initially filed. The date for this is provided on your Meeting of Creditors 341 Notice that informed you of your initial hearing date. Generally 90 days after the meeting of creditors the Notice of Discharge will be filed with the court.
Unless there is a backlog, or a processing delay, the court will usually file the Final Decree and Notice of Close of the Bankruptcy within approximately 30 days after the discharge was issued. Once this is filed, your case is completed.
CHAPTER 13 TIME FRAMES
As stated previously, Chapter 13 cases generally last for 3 – 5 years. A plan payment is made each month during the life of the plan, the first payment beginning the month after filing the petition. The first payment may be due before the first meeting of creditors.
Generally for Chapter 13 cases the debtors will not have to appear in court again. I will appear in court, sometimes numerous times, on your behalf. Additionally, I will be filing various motions and communicating to the trustee regarding your case. I will also be in contact with you throughout the case. During the 3 to 5 year plan it is common for you to have changes in your circumstances, changes in contact information or to need a new vehicle. If any action occurs, or any changes need to be made in your case, I will discuss with you what to expect and what will need to be done in your case.
Sometimes creditors or the trustee will object to the Chapter 13 plan. There are a variety of reasons that this could occur, and the reasons are case specific. If an objection is filed in your case, I will be in contact with you to discuss how to overcome the objections, or address the issues. I will prepare motions responding to the objections and will appear for those motions on your behalf. We may need to amend the plan if needed to address any issues. These are all fairly normal occurrences in Chapter 13 cases.
I will be your attorney for the life of the case. During that time frame if you have any financial changes, you should contact me immediately. We can discuss filing a modified plan, and if necessary, amended schedules. Additionally, before purchasing any items over $1,000, you must contact me as I will need to file motions with the court for approval.
During the life of your case you will see that creditors file what are called Claims. This is normal. In Chapter 13 cases many of your creditors will receive a distribution each month from your plan payment. Their claim notifies all of the relevant parties to your case that they believe they are owed money, and the amount they believe they are owed.
The Chapter 13 trustee will also send to you a Notice of Filed Claims. I will review through this to see that all the necessary claims have been filed, and that no claims appear out of the ordinary. You should also review through this to ensure that the claims appear accurate. If you have questions about the claims filed in your case, please feel free to contact me with questions as I am happy to review this and any other questions you have about your case.
Once the terms of your plan have been completed, the trustee will file a Final Notice of Accounting. There are a few documents that I will file with the court at this point, and I will be in contact with you to obtain signatures as need.
Parties to your case (such as creditors) will have 33 days to object to the close of the case. Once this time frame passes, the court will file the Final Decree and Close of Bankruptcy. At this point your case is closed.
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