Bankruptcy Discharge Does Not Close The Case

11 Oct Bankruptcy Discharge Does Not Close The Case

Creditors and debtors alike can get hammered by acting after a discharge enters but before a case is closed. The trustee still controls estate property, and the automatic stay still protects estate property. This can be a problem, often in a Chapter 7 context.

A Chapter 7 discharge will usually issue two months after the trustee meeting, but the case can remain open to allow the trustee to continue with an investigation if the trustee does not file a No Asset Report. The clerk will not close the case without such a report.

The trustee controls all estate property as long as the estate remains open, which means that a debtor cannot sell or refinance property. The automatic stay continues to protect estate property, so a creditor cannot repossess or foreclose on property.

Your attorney can file a motion to compel a trustee to abandon one or more assets if the trustee is delaying unreasonably, and you can recover sanctions if a creditor acts against your property while the case is open.

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L. Jed Berliner practices exclusively in consumer bankruptcy, foreclosure defense, and related consumer protection litigation such as credit card defenses and suing debt collectors. He established his Springfield, MA practice in 1988. Attorney Berliner is a regular and active contributor to the Bankruptcy Law Network, the Bankruptcy Roundtable, and the National Association of Consumer Bankruptcy Attorneys, three specialized consumer bankruptcy forums on the Internet, and is an informal mentor to regional practitioners. He is recognized by his peers as an expert in consumer bankruptcy issues. He thoroughly enjoys being rated "excellent" in his client surveys.

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