The second date which is very important is about 60 to 90 days after the date the case is filed, which is a deadline to object to the discharge of the debtor. This is a very important date. If a creditor feels that some type of fraud has been committed or that they debtor has done something which should disallow them a fresh start. They have an opportunity to bring an objection, an adversarial complaint to try and hold that debtor accountable on the debt.

Once that date passes it’s very difficult for a creditor to come back in and make any kind of claim upon the debtor. The United States trustee does have additional time. They can bring a motion within a year of the discharge to try and overturn it if they find some sort of evidence where the debtor would be accountable. But basically once that deadline to object to discharge passes, the clerk of the US Bankruptcy Court will issue a discharge letter, which is a one page document saying that the case has gone through to completion. And that discharge letter will be sent to the debtor, counsel, and all the creditors of the debtor.

For all intent and purposes that’s it at that point. Once that discharge letter is sent the creditors whose debts were discharged cannot pursue the debtor. Debts that were not eliminated in the bankruptcy, those creditors can pursue the debtor. For example, on a student loan or a domestic support obligation. And the debtor is free to enter into new agreements and to try and start over in their life fresh.

So chapter 7 from start to finish, from filing the petition to completion is about 120 days. One important thing that I failed to mention, which I’ll mention now is after the case is filed the debtor still has to take a two hour financial management class. Which must be completed prior to the debtor getting a discharge. Now, this is a very important session for a couple reasons. First, the debtor is supposed to take something out of this two hour financial management session so that they don’t get into the same traps that may have caused them to file bankruptcy before.

But two, even more importantly, it’s a requirement in order to get a discharge. Just like the first credit counseling session had to be taken prior to filing the case, the second two hour financial management class must be taken timely for the debtor to be eligible for a discharge. If the debtor does not take this class what happens is the case closes without a discharge, which means the whole case was basically a waste of time. Creditors are still free to go after the debtor. The debts are still due and owing. The debtor has spent money obviously for attorney’s fees and went through the 341 process and went to court, but in essence did not receive any bankruptcy relief. So it’s very important that the debtor takes that two hour financial management class as soon as possible once the case has been filed with the court.

See Also: Bankruptcy Lawyers Phoenix