The Truth About What a Bankruptcy Discharge Does – and What It Doesn’t Do

The Truth About What a Bankruptcy Discharge Does – and What It Doesn’t Do

It is common for people to believe that once their bankruptcy has been discharged, their case is finished. They may be perplexed as to why their trustee continues to contact them. The debtor’s concentration on discharge has caused this misconception. The purpose of working with a bankruptcy attorney is to get you discharged. However, a discharge does not always mean that the procedure is complete.

Recognize the role of the Chapter 7 Trustee

A Chapter 7 bankruptcy trustee’s duties does not finish when you arrive and answer questions at the 341 meeting. Because most debtors do not have any assets that the trustee will handle, the majority of Chapter 7 cases (more than 98 percent) will finish when the trustee meets with the debtor’s creditors. This is frequently owing to the debtor simply having non-valuable assets or assets that are exempt from bankruptcy.

The trustee must still make disbursements

Any bank balances on the date the bankruptcy is filed, as well as any transfers that may be recoverable, must be disclosed to the trustee. If the debtor still has assets, the trustee may be required to distribute them. At the absolute least, the trustee will have to look over any claims that creditors have filed. If there is income in the bankruptcy, the trustee may be required to file a tax return. As you can see, the trustee may still have a lot of work to do after the bankruptcy is discharged.

It’s possible that the debtor won’t have much more work to perform

The debtor, on the other hand, usually has a shorter path to completion of their bankruptcy. The Bankruptcy Code is constructed in such a way that the debtor knows whether or not they will be discharged quickly after filing. If there is a dispute over the debtor receiving a discharge or if a certain debt is not dischargeable, the debtor will be notified as soon as possible.

Creditors receive a notice shortly after the bankruptcy case is filed, outlining the deadlines by which they must oppose the discharge in its entirety or for a specific debt. In most cases, this is 60 days following the date of the first creditors’ meeting.

If a creditor objects to the discharge, he or she must file an adversary proceeding with the court within the time limit. If they don’t, the court will grant them a discharge. The debtor is likely to be relieved that the procedure is now over. However, as previously stated, the trustee has more work to do.

Can a person’s life be changed by bankruptcy? Absolutely. Can they be difficult? They’re not required to be. All you have to do now is contact a bankruptcy lawyer who will take care of the difficult work for you. For a free consultation, call Law Offices of Terrence Fantauzzi at (909) 552-1238.

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