Filing Chapter 7 Bankruptcy in Michigan: What is the Difference Between a Discharge and a Closed Case?

A court discharge is issued in a Chapter 7 bankruptcy when you have met all of the following requirements:

• Completed pre-filing credit counseling. A Certificate of completion must be filed with the court with your filing documents;
• Filed petition and schedules;
• Provided supporting documents (i.e tax returns and paystubs) to the court appointed Trustee for review;
• Attended a 341 Hearing;
• Completed the Post-filing Debtor Education credit counseling requirement within 45 days of initial 341 Hearing date. Certificate of completion must be filed with the court.

The discharge means you have been relieved of all of your pre-filing dischargeable debts and they have been legally eliminated. In the future, if you receive bills from creditors that were included in your case, simply mail them a copy of this discharge.  Just because the discharge is entered, it does not meanyour case is closed. The Trustee needs to file a "No Asset Report" with the court in order to close your case and complete the process. The "No Asset" report states that the Trustee believes there is no "non exempt" real or personal property to liquate for the benefit of creditors. Normally cases close with 5 - 7 days of the discharge. If the "No Asset" report is not filed within this timeframe to close your case, that may suggests that the Trustee believes there is a potential recovery.    

Why Wouldn't My Chapter 7 Bankruptcy Close?

There may be several factors that can lead to the court holding the case open.  The Trustee may be continuing to investigate assets. The biggest practical effect of this is that you are still precluded from transferring assets, selling assets, or settling claims. You are encouraged to have counsel retained to discuss your particular case and determine whether any further action is necessary.  

How Can I Ensure the Best Success in Filing Chapter 7 Bankruptcy in Michigan?

Several steps can be taken to safeguard your assets and produce the best outcome for your Chapter 7 Bankruptcy, such as:

• Hiring an experienced attorney who specializes in bankruptcy law;
• Ensuring your chosen law firm has adequate support staff to administer the requirements of the case;
• Always provide full disclosure to your attorney regarding your property and assets so they can properly advise you and exempt(protect) them on your bankruptcy schedules;
• Properly evaluate the value of your real and personal assets, such as: realtor opinion, professional appraisal, online valuation sites (i..e Kelly Blue Book, Trulia, Zillow, etc.)

Trust Our Bankruptcy Experience

Our firm offers free consultations to discuss your options for filing Chapter 7 Bankruptcy or retaining counsel if you are experiencing an issue in getting case closure for your existing case. Call us today at 866-261-8282 to speak to one of our licensed Michigan Bankruptcy Attorneys or schedule a time online. With over 50 years of combined legal experience promoting debt resolution, we have the knowledge and professionalism to help you find debt relief and long term financial freedom.