What is a Discharge Order
When Will My Chapter 7 Bankruptcy Case End?
For most filers, a Chapter 7 bankruptcy case concludes within a few days after receiving the "discharge order"—the official court order that forgives qualifying debts. Generally, the entire process takes about four months from the initial filing. However, in cases involving "nonexempt assets" that need to be sold, or if there is unresolved litigation, the case can remain open for longer. The case officially ends after the bankruptcy trustee has resolved any outstanding issues, sold any nonexempt assets, paid creditors, and filed a final report with the court.
Bankruptcy Timeline:
1. Complete first course of Credit Counseling
2. File your Chapter 7 Bankruptcy Case
3. Your Bankrutpcy Court hearing (341 hearing-will occur 30 days after your case is filed)
4. Complete your course in debtor education (a/k/a second and final credit counseling course)
5. Wait for your discharge order ( generally 60 days after your credit counseling)
Understanding the Chapter 7 Process
Every Chapter 7 filer goes through a similar process before qualifying for a debt discharge. Here’s what to expect:
- Filing the Bankruptcy Petition: You’ll start by filling out paperwork detailing your assets, debts, income, and expenses.
- Credit Counseling: Complete a credit counseling course before filing.
- 341 Meeting of Creditors: This is the mandatory meeting where creditors can ask questions. Your discharge order is typically issued 60 days after this meeting.
- Resolution of Any Disputes: If a creditor objects or the trustee needs more information, it can extend the time for discharge.
- Final Decree: Once the trustee has liquidated any nonexempt assets, a Final Report is filed, and the case concludes.
In most cases, you’ll receive your discharge 60 to 90 days after the 341 meeting. However, if nonexempt assets are involved, the case may stay open until all assets are managed and funds are distributed.
The Discharge Order
A "discharge order" officially relieves you from liability for qualified debts, such as credit cards, medical bills, and personal loans. This order prevents creditors from attempting to collect discharged debts. The court sends a copy to you and your creditors, but the document will not list each discharged debt individually.
What If I Have Nonexempt Assets?
If you own assets that aren’t exempt, the trustee will collect, sell, and distribute them to your creditors. Complex cases involving significant assets may extend beyond the typical timeframe—sometimes even up to a year.
If Litigation Is Involved
Occasionally, litigation can delay your case. For example:
- A creditor may challenge the dischargeability of a particular debt.
- The trustee might need to recover assets, such as property transferred shortly before filing.
The Trustee’s Final Report
Once all assets are liquidated and funds are distributed, the trustee submits a Final Report to the court. If no objections are raised, the court will issue a final decree, and the case will close.
Reopening a Closed Chapter 7 Case
In rare instances, a closed Chapter 7 case might be reopened if an asset was mistakenly omitted. However, your discharge remains secure and cannot be revoked after a year from the case’s closing.
If you need additional information or help with filing, consider reaching out to a bankruptcy attorney or taking a bankruptcy quiz to identify potential issues specific to your situation.