When you file your chapter 7 case, you are seeking a discharge of your debts. In most cases, you file the case, meet with the bk trustee a month later, take the second online class (the Debtor Education class), and then you get your discharge at the end of month 3.
However, getting your discharge does NOT mean that your case automatically closes.
Your case will not officially close out until the trustee files a final report in your case. Generally, your case will close out that same month that you get your discharge. If you have assets worth collecting on (like an upcoming tax refund or too much equity in your home/car), then the bk trustee may keep the case open while he sells off the asset, sends a letter to your creditors, pays them off, and then files a report to close out the case.
No Asset Cases
In most cases, he’ll file a No Asset Report (or Report of No Distribution), which states that you have nothing worth selling off to pay creditors. Here is what it looks like:
Chapter 7 Trustee’s Report of No Distribution
Chapter 7 Trustee’s Report of No Distribution: having been appointed trustee of the estate of the above-named debtor(s), report that I have neither received any property nor paid any money on account of this estate; that I have made a diligent inquiry into the financial affairs of the debtor(s) and the location of the property belonging to the estate; and that there is no property available for distribution from the estate over and above that exempted by law. Pursuant to Fed R Bank P 5009, I hereby certify that the estate of the above-named debtor(s) has been fully administered. I request that I be discharged from any further duties as trustee. Key information about this case as reported in schedules filed by the debtor(s) or otherwise found in the case record: This case was pending for 5 months. Assets Abandoned (without deducting any secured claims): $ 2740.00, Assets Exempt: $ 5200.00, Claims Scheduled: $ 50347.00, Claims Asserted: Not Applicable, Claims scheduled to be discharged without payment (without deducting the value of collateral or debts excepted from discharge): $ 50347.00. (Hunt tr, Mary)
In these cases, you have something that the trustee wants to sell off and use to pay your creditors. These cases take longer because he needs to liquidate the asset, notify your creditors to file claims, review the claims, and file a report to pay them off and close out the case. This is a fairly complicated topic, and I’ll save it for another entry.
However, it may take up to 2 years for your case to close out in this scenario. Your credit still starts rebounding once you get your discharge, but the case takes much, much longer to close out.
For a teaser, here is an asset case where the Debtors received their discharge in September, but the case didn’t close out until December.
Filing Date # Docket Text 12/12/2017 (3 pgs) Order Approving Chapter 7 Trustee’s Final Report & Account for XXXXX tr, Trustee Chapter 7, Fees awarded: $ 297.00, expenses awarded: $ 0.00; Awarded on 12/12/2017 (avt) (EOD: 12/12/2017) 12/12/2017 (3 pgs) Pending Order (Other) related documents(s): 16 Trustee’s Final Report (TFR) Filed by: (XXXX) [Order# 343738] (EOD: 12/12/2017) 11/18/2017 (6 pgs) BNC Certificate of Service – Notice. (related document(s):Notice of Filing Trustee’s Final Report and Account Before Distribution). Notice Date 11/18/2017. (Admin.) (EOD: 11/18/2017) 11/15/2017 (4 pgs) Notice of Filing Trustee’s Final Report and Account Before Distribution (related document(s): Trustee’s Final Report (TFR)) filed by XXXX) (EOD: 11/15/2017) 11/09/2017 (9 pgs) Chapter 7 Trustee’s Final Report. Reviewed by United States Trustee Filed by the US Trustee for XXXX tr (XXXX (EOD: 11/09/2017) 11/07/2017 (2 pgs) Application for Compensation forXXXX tr, Trustee Chapter 7, fee: $297.11, expenses: $0.00. Filed by XXXX) (EOD: 11/07/2017) 10/30/2017 Remark Re: Bill. No fees due at this time. (avt) (EOD: 10/30/2017) 10/27/2017 Trustee’s Request for a Bill. XXXX) (EOD: 10/27/2017) 09/15/2017 (3 pgs) BNC Certificate of Service – Order of Discharge. (related document(s): Order Discharging Debtor(s)(auto)). Notice Date 09/15/2017. (Admin.) (EOD: 09/15/2017) 09/13/2017 Order Discharging Debtor(s)(auto) (Admin.) (EOD: 09/13/2017) 09/05/2017 (1 pg) Personal Financial Management Course Certificate for Joint DebtorXXXX Provided by 001 DebtorEdu LLC, 8006103920 (EOD: 09/05/2017) 09/05/2017 (1 pg) Personal Financial Management Course Certificate for Debtor XXXX Provided by 001 DebtorEdu LLC, 8006103920 (EOD: 09/05/2017)