A Tale of Two Timelines in Chapter 7 Bankruptcy Cases

There are two major timelines to be aware of in a Chapter 7 Bankruptcy:

1) the discharge timeline; and

2) the timeline a trustee has to administer assets.

A Chapter 7 bankruptcy discharge can happen as early as 60 days following the creditor’s meeting, provided a creditor hasn’t filed an objection to discharge.  Thus, a typical bankruptcy discharge can occur just over 90 days of filing the case.

However, many debtors can be surprised to discover that the discharge has no bearing on the timeline involved with “asset” cases: when a debtor has assets in their bankruptcy estate that cannot be protected by using exemptions.  “Pigs get fed, hogs get slaughtered,” the saying goes, as the bankruptcy code contemplates giving folks a “fresh start” rather than a “head start” and allowing a debtor to keep a fleet of Harley Davidson’s or that extra couple hundred acres of family land, just doesn’t seem fair in light of their ability to discharge thousands of dollars of debt.

The trustee may take several years to administer some assets, just as it would for anybody to sell a home, or a that used boat that’s been killing the lawn with the weathered “For Sale” sign on our neighbor’s property.  Each asset case is different and there is no way of telling how long it may take for a trustee to administer an asset of the estate.  Once the assets are sold, the US Trustee, who oversees the performance of the bankruptcy trustee, must review the trustee’s report and final account before the asset case can be finally closed.