Why is Your Chapter 7 Case Still Open After Your Discharge

Why is my case open after my discharge?

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If you file Chapter 7 bankruptcy and received a discharge that might not necessarily mean that your case is over.

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You might have not seen your case close when you got your discharge. If there were no assets of yours to distribute to creditors- and your trustee made a formal declaration that there were none prior to your discharge- then your case will close at the time you receive your discharge. 

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If, however, either there were assets of yours to liquidate, or of a third party to recover, or even if your trustee is not sure if there were are any assets to recoup, then your Chapter 7 case will still be open even though you’ve received a discharge. This is because your discharge is entirely independent of the fact that there might be assets to distribute to creditors.

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If there are assets to distribute in your case, it could remain open for several years beyond your discharge in order to recover the assets, notify creditors to allow them to file claims, and for the trustee to then subsequently distribute those assets among your creditors.

In the event there are assets to distribute, you do not necessarily need to do anything different with your life while the distribution is ongoing, with the exception being if you were over your exemptions and are the one who needs to fund the distribution.

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You just need to be aware that discharging your case and closing your case are different things, and just because your case is discharged does not mean it is definitely going to close at the same time.