One of the most exciting things that will happen to you when you file for bankruptcy is receiving the discharge. It’s the most important reason people file for bankruptcy and it means you are no longer legally obligated to pay a debt. But receiving the discharge doesn’t mean you are free to return to your old spending habits or that you should go on as usual as if nothing ever happened.
Your discharge is your goal, but it doesn’t always mean your bankruptcy is over.
There are several things post-discharge that you should know.
The Bankruptcy Estate
First, it’s important to understand the trustee’s job and his or her role concerning the bankruptcy estate.
In Chapter 7 bankruptcy, the trustee’s job might continue past the meeting of creditors. This is especially true if there are assets (which can be rare in chapter 7), but can also be the case if the trustee has to investigate whether or not you have a right to discharge or if there are any non-exempt assets that can be turned into cash.
The trustee will need to assess your bank balances, if this has not yet been done, and conduct transfers if there is anything in those accounts that can be recovered. If there are assets to distribute, he or she will need to review creditors’ claims and if needed, file a tax return.
All of this is happening concurrently as your case moves forward and you get closer to discharge. You’ll know fairly soon after filing your bankruptcy whether or not you’re eligible for discharge or if there’s a dispute over a debt or if a debt is not eligible for discharge. In most cases, creditors are given 60 days after the meeting of creditors to challenge a discharge by filing an adversary proceeding with the bankruptcy court.
If this doesn’t happen you are issued your discharge by the court.
But your case continues – at least the trustee’s work on your case. Your discharge has little bearing on the trustee’s responsibilities at this point and any assets that were eligible for liquidation will continue.
It’s possible the trustee will request additional information from you and you’re still legally obligated to comply with these requests. If you fail to do so, it could lead to an action to revoke the discharge.
The administration of the bankruptcy estate to take years, and all the while you are responsible for providing information if asked or putting your case at risk – even though it seems to be over.
If you’d like to know more about the overall role of the trustee in bankruptcy, check out this information from The Balance.
Most Chapter 7 Cases Include No Assets
In most cases, debtors don’t need to worry about this. Chapter 7 cases often include no assets, which means the trustee can finish his or her work quickly – often before you receive your discharge. But it’s important to understand your responsibilities and know what you need to do to protect your discharge, should any questions arise months or years after you’re granted your discharge.
If you’ve received a request for information from the bankruptcy trustee and you aren’t sure what to do, we can help. We’ll also assist you through the filing process and help you anticipate any issues. For more information or to schedule an appointment, contact the Law Office of Robert M. Geller at (813) 254-5696.