Completing Your Bankruptcy

In a Chapter 7 case, the bankruptcy court will usually send you a “discharge” approximately 60 days after your meeting of creditors. The discharge is your notice that your case is complete and that all dischargeable debts have been discharged (wiped out). Unfortunately, a lot of things can occur before the end of that 60 day period to interfere with your discharge. These things may include:

Substantial Abuse

If you file a Chapter 7 case but your budget is improperly prepared, a motion will be filed to dismiss your case for what is called “substantial abuse.” This means that the United States Trustee believes that you have the ability to repay a meaningful portion of your debts and you are trying to avoid doing so. This type of motion is very rare if your papers are prepared correctly. This is yet another reason why you should have an attorney assist you in preparing your court documents.

Concealing Property or Failing to Cooperate

A motion to deny your discharge may also be filed if the trustee discovers that you have hidden property from your creditors, you have destroyed evidence, or failed to follow an order of the bankruptcy court.

Adversary Proceedings

Any of your creditors can file what is called an “adversary proceeding” if the creditor believes it can prove that you have done something wrong, such as providing false information on a credit application or running up an account without the intent to pay it. The creditor has to actually file a separate lawsuit, pay a filing fee, and bear the burden of proving that you did what the creditor alleges. If the creditor is successful, you will have to pay that creditor but you may still receive a discharge from all your other debts. You can lessen the risk of having an adversary proceeding filed by taking certain steps before filing your bankruptcy. The attorneys will advise you about the risks of an adversary proceeding in your case upon the information you provide at your free initial consultation.

Chapter 13 cases do not end 60 days after the meeting of creditors because you have to make monthly payments to the trustee. Because you are paying back a portion of your debts in a Chapter 13 case, you are much less likely to have an adversary proceeding or a motion to dismiss filed.