In a Chapter 7 bankruptcy case, the endgame is to receive a Chapter 7 discharge issued by the bankruptcy judge. A bankruptcy discharge is like wrapping yourself in a federal blanket of protection. The bankruptcy discharge contains a permanent injunction that applies to all creditors whose debts are discharged in the bankruptcy. In other words, from the date you receive your discharge until forever, these creditors are permanently prohibited from ever attempting to collect the debt against you. That same protection applies to all debt collectors and any other person or entity that either buys or attempts to collect the discharged debt as well.
In a normal Chapter 7 case, the bankruptcy discharge usually arrives in the mail approximately 120 days from the date of filing. Now, I did say a normal Chapter 7. In certain circumstances, a creditor may challenge the debt’s ability to be discharged at all. Likewise, there may be other reasons why the discharge is held up.
But, in a normal Chapter 7, a debtor can anticipate that the discharge will arrive in approximately 120 days. During those 120 days, the bankruptcy trustee is making sure that the bankruptcy process is protected. The trustee is also making sure that the debtor has complied with the bankruptcy code and rules. The debtor has certain duties that must be fulfilled before they are eligible to receive their discharge. And lastly, the trustee has to make sure that the creditors are also a part of the process.
In most chapter 7 cases, the creditors don’t engage or file claims. In a small percentage of cases, the bankruptcy trustee alerts the creditors that there are assets that will be distributed and that the creditor should file a claim if they would like to share in the distribution.
If you are thinking about filing a Chapter 7 or Chapter 13 consumer bankruptcy and would like a complimentary strategy session with a certified bankruptcy expert, please feel free to contact The Dellutri Law Group and we will schedule a convenient time for you to come in and meet with one of our attorneys.