When Does My Bankruptcy Case End?
"When does my bankruptcy case end?" may sound like a simple question, but the answer can be very confusing. There are several different milestones that affect your bankruptcy case. The most common of these events are: (1) an order of
bankruptcy discharge; (2) an order to close the case; and (3) an order of
dismissal.
The bankruptcy discharge generally occurs near the end of the debtor's case. Once the discharge is entered, the automatic stay is no longer in place. The discharge injunction, which is narrower in scope, replaces the automatic stay injunction. That means your creditors may collect in any way that is not prohibited by the discharge injunction. An example of this is a non-dischargeable income tax debt or student loan. Once the
Chapter 7 discharge is entered, the tax or
student loan collector is no longer prohibited from garnishing wages or seizing property.
The discharge order does not close the bankruptcy case. Typically an order to close a bankruptcy case follows shortly after an order of discharge, but sometimes the case will continue after the discharge order is entered. This usually happens when a Chapter 7 trustee keeps a bankruptcy case open to administer assets and distribute the proceeds to creditors. The case closes once the estate is fully administered, the trustee files a statement that all trustee duties are completed, and all issues in the bankruptcy case are resolved.
Dismissal of the case ordinarily means that the court stopped all proceedings in the main bankruptcy case and any pending adversary proceedings. When a dismissal is entered, the debtor does not receive a discharge. A debtor can request a voluntary dismissal, or the trustee or creditor can request an involuntary dismissal. A hearing is typically required for dismissal, and the case terminates when the court enters the dismissal order.
Dismissal can have serious consequences. In some cases the debtor may be prohibited from filing another bankruptcy case for 180 days. In other cases the debtor may lose the protection of the automatic stay in a future bankruptcy case, unless permitted by the court. It is important to investigate all options with your attorney before allowing your case to be dismissed.
The Bankruptcy Code is very complex and requires the guidance of an experienced attorney. Simple questions like, "When does my bankruptcy case end?" has many "it depends" answers that are determined by the unique facts of your case. An experienced bankruptcy attorney can answer these questions for you and get you the debt relief you need.
Contact the experienced Chicago bankruptcy attorneys at Glanzer & Associates, P.C. at 1-312-644-2227 to discuss your specific situation, and to schedule your free, in-person consultation.