Is a Bankruptcy Case Closed After Discharge?

Timing of a bankruptcy discharge depends on what type of bankruptcy Chapter you file under.  Chapter 7 discharges occur after approximately 4 months from the date of filing the Petition.  The remaining unsecured debts are discharged.  In a Chapter 11 or Chapter 13, the discharge occurs approximately 3-5 years after the payment plan is completed by the debtor. If there is no pending litigation, then the clerk of the bankruptcy court will automatically mail a copy of the bankruptcy discharge papers to the debtor, the debtor’s attorney, all creditors and the trustee. The notice of bankruptcy discharge informs your creditors that their unsecured debts have been discharged, and that they are not allowed to collect the debts or contact you any more.  If they continue collection proceedings aginst you, they face contempt of the court order.  If the court clerk inadvertently forgets to mail a copy of the discharge notice to one of your creditors, the bankruptcy discharge order is still valid. 

Can Court Revoke Discharge?

Once the discharge order is issued by the court, the case is closed.  However, there are special circumstances when the court may revoke the bankruptcy discharge papers.  These circumstances include the following:

In a Chapter 7 discharge, if the trustee or a creditor asks the court to revoke the discharge because they have discovered fraud or the debtor failed to disclose assets, and the court finds of evidence that the allegations are true, the court may revoke the discharge.

In a Chapter 11 or 13 bankruptcy, the court may revoke the discharge if there is confirmation that there was fraud involved with regard to the payment plan. 

Creditor Attempts to Collect Debt After Discharge

If one of your creditors tries to collect a discharged debt, you should have your bankruptcy attorney file a motion with the court to reopen the case in order to rule on the matter.  The bankruptcy court will usually do so to make sure that the discharge injunction is not violated.  If the court finds the allegation is true, the creditor is subject to a civil contempt fine.   

Certain Statutory Debts that are Not Dischargeable 

There are certain statutory debts that cannot be discharged in any type of bankruptcy.  These include the following:

• Income taxes (except federal taxes that are 3 years or older may be discharged)
• Spousal and child support
• Criminal fines or penalties
• Debts regarding injuries caused by driving under the influence of alcohol or drugs
• Personal injury debts
• Debts resulting from fraud or embezzlement 
• Student loans  

Consult with a Bankruptcy Attorney 

If you have questions about filing bankruptcy, bankruptcy procedures or bankruptcy discharge, you should contact a bankruptcy attorney.  The attorney is an expert at bankruptcy laws, and can answer your questions.