When a Chapter 7 bankruptcy is filed, the trustee’s responsibility is to see if there are any assets to administer for the benefit of the creditors. In the typical Chapter 7 case, there are no assets to administer. If there are, the case will remain open until all the approved claims are paid. Typically, the bankruptcy court clerk will mail out notices of discharge in a Chapter 7 case about 4 or 5 months after the case has been filed. Keep in mind that this is just a rough time frame. There is no rigid rule on this.
The notice of discharge does not mean, however, that the case is closed. The case is not officially closed until the court files a notice stating that it is closed. The trustee will not close the case until any assets he has recovered have been paid out to the creditors. But for most people, this matters little. What people care most about is getting the discharge. This is the key document showing that a debtor’s debts have been wiped out.
You should keep in mind a few things about a discharge. Remember that discharge does not automatically mean that the case is completely finished. If the trustee told you to give him certain things, he will expect you to comply. You may be required to show him a tax return or some other information particular to your case.
Regardless, keep in mind that he will expect compliance. Failure to cooperate may mean your discharge can be set aside or revoked. Also, you should be aware that certain types of debts are not automatically discharged in a Chapter 7 bankruptcy discharge. Certain types of taxes, student loans, fines and costs in criminal cases, and some other rare types of debts may survive the bankruptcy. This is where you will need to be listening to your attorney’s guidance.
Don’t expect your credit reports instantly to reflect the status of the discharged debts. Creditors are required to report accurate information to the credit bureaus, but this can take some time. Once your discharge has been granted, the creditors will be required to update the information they have on you.
Their information should reflect the new status of the debts as having been wiped out. A good idea is to review your credit reports a few months after your discharge and verify that the information is accurate. If you see inaccurate information, you can dispute what you see, and it will be updated.
So, make sure you save all notices you get from the court during your bankruptcy, including your discharge notice. You will certainly need it later on.