A Chapter 7 Discharge and a Chapter 7 Final Decree don’t necessarily come at the same time, although they often do if a case is a no asset Chapter 7 case. When a Chapter 7 bankruptcy case is filed, the debtor is asking to be released from the legal obligation to pay his/her debts – in legal terms to receive a discharge. The debtor’s discharge and the final decree that closes the case are independent actions by the court that don’t always occur at the same time.
All the property of the debtor, except what the debtor can exempt (protect from creditors), becomes property of the bankruptcy estate, and is controlled by the Chapter 7 bankruptcy Trustee. If all of the debtor’s property is exempt, a final decree may be issued simultaneously with the discharge. However their case may remain open for a long time while creditors receive a distribution of money if there was non-exempt property.
The discharge is usually entered just a few months after filing, and the debtor is able to move forward with his life. The bankruptcy estate will remain open as long as it takes for the Trustee to liquidate the non-exempt property, distribute the funds to creditors, and file a final report. When all the assets are dealt with, the Final Decree is issued and the case closed.
See also:
Word Of The Week: Discharge August 10, 2008 by Eugene Mechionne CT Bankruptcy Lawyer
What Property Can I Keep If I File Bankruptcy? March 11, 2007 by Susanne Robicsek, Charlotte NC Bankruptcy Lawyer
What Property Is Exempt (Protected) In North Carolina? March 12, 2007 by Susanne Robicsek, Charlotte NC Bankruptcy Lawyer
What Debts Survive My Bankruptcy? June 10, 2008 by Karen Oakes, Oregon Bankruptcy Lawyer
Bankruptcy Discharge And Debts Incurred By Fraud April 19, 2008 by Cathy Moran, CA Bay Area Bankruptcy Lawyer
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